Auto companies prepare financial packages to help dealerships


Several leading automakers are working on or rolling out incentive packages to support their dealers who have been hit hard by lockdowns in states to check the spread of the pandemic.

These incentives being planned or offered by

, , Renault India, Toyota Kirloskar Motor, Daimler India Commercial Vehicles and Honda Motorcycle & Scooter India include financial support to offset interest cost on inventory during the lockdown, extension in credit periods, insurance cover, salary support and reimbursement of vaccination expenses for workers.

Companies are also working at quick resolution of claims to facilitate cash flow at dealerships, as retail outlets gradually open up with several state governments expected to ease restrictions over the next few weeks, as the number of Covid-19 cases falls.

“While revenues thinned, outflow continued towards inventory costs, rent and manpower expenses, becoming a pain point for dealer partners. We expedited payment of all incentives and reserve funds to support our channel partners”, said Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki.

Maruti Suzuki has also initiated discussions with banks for a moratorium on the loans taken for inventory funding for the period of lockdowns. “To help square off loans of dealers who take vehicles against letters of credit, we have extended the credit period till the end of June. We are also considering some financial support on interest cost on inventory for dealers who have been under lockdown for more than 30 days. A decision will be taken shortly,” said Srivastava.

Tata Motors has introduced ‘business sustainability support’ for its channel partners for the commercial vehicle business unit. Apart from faster claim settlement, the company is extending 45 days’ inventory carrying cost support on unsold stock and group insurance coverage of 1 lakh for dealer employees.

Rival Daimler India Commercial Vehicles is bearing half the salary cost of sales staff at dealerships for four weeks, as well as offering dealers a 1 lakh Covid-19 medical insurance for all frontline employees, 2 lakh group insurance cover, 20 days’ credit for vehicles in stock (as on May 15) and an incentive of 500 per breakdown for technicians attending to roadside assistance requests.



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