This story is from September 11, 2019

Amaravati uncertainty strikes automobile showrooms hard

The automobile industry is in a slump nationwide. But in Amaravati the decline in sales is more when compared to other areas in the country.
Amaravati uncertainty strikes automobile showrooms hard
VIJAYAWADA: The automobile industry is in a slump nationwide. But in Amaravati the decline in sales is more when compared to other areas in the country. Automobile dealers in Amaravati and its two supporting cities — Vijayawada and Guntur — complain that the sales are down at least double the national slump. Abrupt halt to construction activity in the capital region has hit the automobile sector hard.
While the auto sector recorded 24 per cent decline in overall sales in August, sales declined by over 50 per cent in AP capital region, according to auto dealers.
Many auto companies, including those in luxury segment, opened showrooms in and around Vijayawada after the state government announced the location of capital city in the region.
Automobile showrooms in Amaravati witnessed a decent growth year on year even in niche class vehicles like Jaguar, Land Rover, Audi, Mercedes Benz and Volvo in the four-wheeler segment, and Triumph, Benelli, Kawasaki and UM Motors in luxury bikes. The auto companies made a beeline to set up makeshift tents to showcase their vehicles. Every week there used to be a makeshift shop in the capital region by one or the other car company.
Now, the future looks grim with the overall slowdown in auto sector coupled with the uncertainty over Amaravati that has affected all businesses in the region, but the slump seems to have hit the auto sector particularly hard.
Jaguar Land Rover (JLR) set up an exclusive showroom at Atamakuru near Mangalagiri after the announcement of the capital in 2017. The sales used to be in the range of six to 10 cars per month which is considered decent for a city like Vijayawada, which is still a tier-2 city, said JLR sales head K Ramaswamy. The sales have now come down to 2 to 3 cars in the last four months. There have even been cancellation of bookings after May 2019, he added.

Amaravati uncertainty strikes automobile showrooms hard

Ramaswamy said a major chunk of their sales come from those having businesses in capital Amaravati, not from those living in the capital area. “Though car sales increased in the capital area in the last four years, locals mostly preferred economy class vehicles,” he said.
While noting that overall sales have come down, Ramaswamy said they are now getting business from Rayalaseema districts. “We delivered seven cars which cost more than Rs 1 crore to people from Rayalaseema districts. Three cars were sold to people from Anantapur in August alone,” he added.
Luxury bike maker Triumph also set up a store in Vijayawada in September 2016 after the city became part of the capital region. P Jayanth, sales representative of Triumph, said they sold the highest number of bikes in Guntur. “The sales have come down considerably now owing to many factors and uncertainty over Amaravati is also playing a role as the broader sentiment is negative,” he said.
Apart from the niche segment, sale of economy class vehicles has also taken a beating in the capital area.
Maruti was the first car-maker to set up a showroom in the capital area after witnessing huge demand from the local market. J Ramesh, sales head at Maruti’s Amaravati showroom, said they need to sell 25 cars per month to break even, but have been struggling to sell even seven cars a month.
The showroom, set up with a futuristic outlook, wears a deserted look now.
The situation is no different for other auto dealers, including two-wheeler showrooms, as everyone is witnessing the double impact of slowdown and uncertain future of Amaravati. A Honda two-wheeler showroom that opened recently at Tulluru after the elections is struggling to survive. A Vijay Kumar, the sales in-charge, said they did better business when they were operating from Guntur. “We opened the showroom keeping the earlier demand from the capital area in mind, but the situation got reversed after we opened the showroom here,” he laments.
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