God’s own Country, the state of Kerala, has been suffering from the wrath of floods caused by torrential rains over the past month. Now, MoneyControl is reporting that the rains may have wiped out cars worth Rs 1,000 crore that was stocked with dealers for the Onam festival season, which sees big car sales in the state.
Showrooms in the flood-affected areas remained marooned for more than a week under the rising waters caused by the heaviest rains in nearly 100 years, that killed 373 people across the state and left thousands more homeless. The state government has estimated a loss of Rs 20,000 crore from the floods.
Kerala is the biggest car market in the six states in the southern region of the country, making up for more than one-fourth of the sales across the South. Around 17,500 cars stored in 350 dealerships across the state are estimated to have suffered damage from the floods. With the average price of a car sold in Kerala being Rs 6 lakhs, dealers across the state face a huge bill to pay back to carmakers. This is because cars that are submerged underwater for a long period of time are generally scrapped as they have very little resale value. However, carmakers could help out the dealers by compensating them for their losses.
It is not just the car dealers that have suffered from the floods. Kerala has over 700 dealerships that sell everything from scooters and mopeds to trucks, buses and tractors, who have all suffered greatly due to the floods.
The floods are also expected to affect the sales of cars and other vehicles in the coming two to three months as the people of the state look to rebuild and repair their lives. Before the calamity, the state had been rising among the ranks for the best automotive sales with the financial capital of Kochi becoming a big Tier II hub for the sale of cars from luxury carmakers.
Kerala is finally starting to get back on its feet after the deluge, but there is still a lot of work to be done before the state returns to prosperity. In the meantime, businesses like car dealerships have a long road ahead as they look to insurers to recoup some of their losses caused by the floods. The Federation of Automobile Dealers Association is currently helping dealers file claims and are asking insurers to release at least 75% of the insured amount, an executive of the Federation told MoneyControl.