F A D A Reaches Out to All the Stateholders of

Auto Retail to Help Rebuild Kerala

 

New Delhi, 28th August’18: The unprecedented flood in Kerala have been declared by the Centre as Level 3 calamity and has been tough moment for everyone in the State.

 

From Auto Retail point of view, the situation of retail sales is very alarming and has drastically dropped to the zero mark. The entire Auto trade has come under severe stress. At this stage, most dealerships are also flush with higher stocks owing to Onam. The situation is unlikely to change in immediate future as the State gets back on its feet.

 

F A D A, the apex body of Auto Retail in India has hence written to all the stakeholders of Auto Retail, may it be OEMs, Banks, Finance Companies or Insurance Companies with the following request:

 

To OEMs:

 

1. To provide 30 days of Special Credit on Spare parts despatches in August and September, as we expect a heavy rush in all workshops which in turn will create Huge Temporary demand for Spare Parts which No Dealer would have planned in his regular working Capital.

 

2. To regulate supply of vehicles to dealers who are already holding large inventories, this shall help dealers to correct stocks thereby reducing inventories and holding costs. In the present context, poor levels of retails will have a huge impact on the Cash Flow and the Dealerships are going to be burdened with unforeseen Expenses due to the Flood situation.

 

To Banks and Finance Companies:

 

For Extension of the Repayment Tranche of the Inventory Funding Accounts of our Dealer Members by at least four weeks without any penalty to the dealers to keep the accounts healthy and not get Categorised as delayed repayment as the Cash Flow during this time will

be drastically low and there will be huge unforeseen expenses which the dealership has not planned for. This would help Our Members to Regulate their Working Capital Effectively in the Short Term, till the situation returns to near normalcy in a month’s time.

 

To Insurance Companies:

 

1. Faster processing of claims of auto customers as well as dealers by disbursing

 

a. 70% of the claim amount should be disbursed immediately on Receipt of the Claim Form along with the Claim Estimate 

 

b. 30% of the balance amount on receipt of complete set of documentation. This will help dealers in Regulating the Extra Working Capital, which was not anticipated or planned for.

 

2. Appointing One Point Contact for Auto Dealers, within Your Regional or Divisional Offices with whom they could Co-ordinate for Assisting them in Expeditious settlement of claims.

 

F A D A is happy to share that few companies have already responded to our requests and many are in process of sending the same as we hope to hear from them within a week. This will not only help the Auto Trade in getting back to normalcy but will also contribute towards speedier re-building of the State and thus its Economy. 

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