This financial support will be to pay salaries and meet other fixed cost at the company’s 80 dealer outlets in the country, Skoda said on Tuesday. It may be releasing Rs 50-60 crore this quarter to meet the obligations on behalf of dealers.
Skoda is in a phase of building up its network as it renews its India strategy, and it wants to protect the channel partners in these difficult times, said the company.
The company needs to make sure that the core dealer network is intact and ready before it rolls out its India 2.0 strategy, Skoda Auto India director of sales, service and marketing Zac Hollis told ET.
“We are not only taking care of the immediate cash flow needs of the dealers, but are assuring them of full support for the next three months. Their health and safety is critical in our future growth and we are using this time well to maintain the network is good health,” Hollis added.
The company is working on a plan to resume operation — dealer-to-dealer and region-to-region — depending on the lifting of the current lockdown.
Other carmakers like Maruti Suzuki, Hyundai, Honda and Toyota have released advance payments to their dealers for March. Since April too is likely to be washed out, the automakers may be compelled to shell out more from their pocket just like Skoda to ensure that their retail chains survived this uncertain period.
Meanwhile, despite the lockdown, Skoda is not delaying its new car launches. It will be rolling out the BS-VI version of the Rapid, Karoq, Superb and the Octavia RS as soon as the lockdown is lifted, the company said.
Passenger vehicle sales in India almost halved in March and the April sales are likely to be even worse because of the lockdown, which is expected to be lifted only partially in mid-April.
Hollis said the sentiment was weak and the passenger vehicle market was likely to remain in the negative zone. Skoda will look at ensuring the BS-VI products are made accessible with attractive prices and finance options to ease the pressure on consumers wallets, he said.