Covid-19 worsens automobile business

MB Subba

The vehicle and automobile business had taken a hit with the introduction of secondary collateral towards the end of 2018. The Covid-19 pandemic made the matter worse.

Bookings and sales of all types of vehicles fell sharply after the country started to feel the impact of the pandemic. The vehicles that were dispatched by suppliers have been stuck in various places in India and other countries.

Many buyers, mostly from the tourism sector, have cancelled their orders, according to vehicle and automobile dealers.

The financial impact will depend on how long the lockdown lasts.

CEO of Ugen Trading House, Ugen Norbu Jamyang, said that automobile and commercial vehicles business was affected even before the Covid-19 pandemic. It has, by his own account, gone down by 80 percent.

According to him, the company was paying a huge amount of loans to banks on Nu 150 million worth of vehicle and machinery stocks. His Majesty’s interest/EMI waiver kidu came as a relief, he added.

“The Druk Gyalpo’s Relief kidu is very holistic as it benefited all sectors, not only the tourism sector,” he said.

To minimise the impact, dealers are using lockdown relaxation windows in India to ship booked vehicles and deliver them to the customers.

The State Trading Corporation Limited (STCBL), which deals in four types of vehicles – Tata, Toyota, Eicher and SML ISUZU – says that there has been almost no business since the lockdown in India since March.

CEO of STCBL, Kuenga Namgay, said, “There is almost no sale. The bookings of busses for the tourism sector have been cancelled.”

The import was not totally stopped but the SCTBL has asked suppliers not to dispatch vehicles due to lockdown. He said that additional demurrage charges were an issue as it would take time to ship the vehicles to Bhutan.

He said that suppliers would be asked to send booked vehicles only after receiving clearance from the Indian customs. STCBL, he said, had a stock of 10 vehicles in Kolkata, which were supposed to arrive in Jaigoan yesterday.

He added that some vehicles were held up in Singapore and Bangkok.

He said that the company was negotiating on demurrage charges “which is so huge”. According to him, the import of Tata vehicles is relatively easy as they can be directly dispatched to Jaigoan from the factories.

Bhutan Hyundai Motors estimates that the business has been down by 50 percent. However, the company has been able to sustain and retain its employees.

The company imported about 50 vehicles through the lockdown relaxation windows.

The company’s senior general manager, Pema Lotay, said that the import of vehicles was affected due to the lockdown. Vehicles that were dispatched by suppliers before the lockdown have been stuck in different places.

The company imports vehicles from Chennai, India.

“One consignment was dispatched on March 23. The vehicles have been stuck near Chennai,” he said.

Pema Lotay said that diplomatic contacts between India and Bhutan were helping to receive deliveries. The foreign ministry is helping the importers pass vehicles to Bhutan.

“Importing vehicles now involves a lot of hassle. But we do understand that it’s not a normal time,” he said.

Before car carrier trailers were not allowed into Bhutan and imported cars were driven into the country one by one. To ease the problem, the government allowed the trailers.

Pema Lotay said that the company used to receive one to two bookings each day.

Vehicle dealers are using cargo flights to import spare parts from Bangkok and South Korea. But the dealers say they are not able to get all types of spare parts.

“The main vehicle parts of Hyundai vehicles are available only in Guwahati. We have not been able to get parts from there since the lockdown started,” Pema Lotay said.

Last year, the number of vehicles in the country had increased by more than 6 percent to 106,681 from 100,544 in the previous year.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply