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Auto dealers seek govt, RBI support to tide over second wave of COVID-19


The industry body has urged to give a moratorium.
The body has also suggested the RBI to reduce interest rates.
New Delhi, May 13 (PTI) Automotive dealers have sought fiscal support, including an extension of GST payment for the next three months, to survive the second wave of COVID-19.
As per industry sources, the automotive dealers body FADA has written to Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das, apprising them of the difficulties being faced by the sector while seeking immediate relief measures.
Federation of Automobile Dealers Associations (FADA), which represents over 15,000 dealers having around 25,000 dealerships across the country, has sought a three-month extension for the delay in filing returns of GST payment, the sources said. ....

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Two-wheeler dealers fear default on loan repayment as inventory levels rise


Covid second wave and subsequent lockdown impacts sales
Suppressed demand due to the Covid second wave and subsequent lockdown has pushed up the inventory levels of two-wheelers at dealerships across the country. Compared to an inventory of 15-20 days prior to the lockdown in the first quarter of 2020, the inventory has climbed up to 41-46 days at the end of the fourth quarter of 2021. This has put a majority of dealers in the two wheeler segment in the danger of defaulting on credit.
Vinkesh Gulati, President, FADA told BusinessLine “We already started the lockdown with a high inventory level of 40-plus days. After which, there have been no sales. A typical tranche cycle of a bank is 30-45 days, after which the dealers have to repay the loans. The dates for the repayment of loans are approaching. However, dealers are yet to sell off their inventory, so they don’t have the money to repay.” ....

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