According to a media report, the Covid-19 lockdown is expected to result in the closure of at least 10% of commercial vehicle (CV) dealerships in the next 8-12 months.
The report states that dealerships want margins to be increased and liquidity in order to survive. At present, margins for commercial vehicles at Indian dealerships are just 1-2%. Some dealerships might even merge with larger dealers.
According to Vinkesh Gulati, Vice-President, Federation of Automobile Dealers Associations of India, the cost structures and operating economics of dealerships has been adversely affected due to the lockdown. Even in Tier II and Tier III markets, the cost of operations and manpower are very high.
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