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Icra Ratings Has Negative Outlook for Automotive Dealership Segment in India

Auto News - Published on Wed, 13 Nov 2019

Image Source: khaleejtimes
Icra Ratings said it that has a negative outlook for the Indian domestic auto dealership sector due to decline in credit profile of industry participants amid slowing sales and high working capital debt. The on-going downturn in the automotive industry has severely impacted the profitability of automobile dealerships which is expected to be at a five year low. Icra VP Mr Ashish Modani said that "OEMs as well as their dealers are providing hefty discounts to clear up dealership inventory to ease their liquidity pressure, however, overall retail demand remains tepid. Owing to deep discount and negative operating leverage, profitability of automobile dealerships is expected to at a five-year low in the current fiscal.”

He added that the muted industry scenario has stressed credit profile of dealers, especially those of new entrants and, has forced some dealerships to shut down as well.

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Posted By : Arun Huidrom on Wed, 13 Nov 2019
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