Vijayawada automobile spare dealers in dire straits

The fate of 700 automobile spare parts dealers and retailers in the city hangs in balance as their sales have crashed by 40 per cent over the last three years.

Around 60 odd loss-making retail shops have downed shutters. The remaining retailers fear that if the sales slump continues for another year, even big dealers will be in a soup.

M V Prasad, president of Automobile Motor Merchants' Association (Amma), told Business Standard that the market for auto spare parts which once used to be over Rs 1,000 crore had shrunk significantly in the recent years.

Over 300 members of the association are finding it hard to cope with the situation. Nearly eight years ago, customers from Karnataka, Orissa, Rayalaseema and Telangana used to throng their shops for purchase of spare parts; such was their reputation for quality and workmanship.

The first blow was dealt by the number of players who entered the auto spare parts market. Auto distributors and dealers increased in number not only in other districts but in Krishna district as well and the competition had become fierce.

Besides the mushrooming of a huge number of dealers, the crisis in truck industry also took a heavy toll on the local spare parts retailers.

The third blow to the auto spare parts sector was the fall in sales of old car brands like Ambassador, Fiat.

"The invasion of market by the new generation of two-wheelers and four-wheelers has crushed the retail market beyond repair. These new vehicles do not need repairs for three or four years after their purchase. Added to this, every year two- and four-wheeler companies are releasing brand new models. Retailers, who stocked parts of old model vehicles, have run into irrecoverable losses, because of their inventories," Prasad said.

Amma general secretary B V Narayana Rao said that car and vehicle companies opened their own authorised workshops which sold spare parts and serviced vehicles.

"Only some owners of Maruti and Tata vehicles get their vehicles repaired outside. It is not exaggerating to say that only 40-50 car and other vehicle spare parts dealers are doing good business. Others are just pulling along; they do not know what business they should get into now after having spent three or four decades in the auto parts business. A few years ago, Vijayawada was famous for bus and truck body-building, now even that business has come down drastically," he said.

"Vijayawada auto spare parts industry is the biggest self-employed industry in the country. The industry has survived without the government's help all these years. Now it is in doldrums. Diesel rates have doubled in three years. This is also one of the reasons for the downtrend in sales. We have not seen any new shop coming up during the last five years," he said.

S Hussein of Disposal Motor Merchants' Association said that when the diesel rate was Rs 12 a litre, the truckers got a rate of Rs 1,200 per tonne. Now diesel is sold at Rs 22.59 per litre, and the lorry owners get Rs 1,150.

As the number of trucks had gone up, the number of trips per truck also came down. Consequently, fleet operators are also not going for new spare parts, he said.