With most dealers busy fixing damaged vehicles due to the recent flood, new car sales are seeing a 25-30% drop in Mumbai one of the major contributors to all-India industry sales. The city currently accounts for 18-20% of car sales.
Owners of premium vehicles like the Honda Accord, Skoda Superb, Toyota Camry, BMWs and Mercedes have been hit the most, since most of the damaged parts have to be imported as these cars have a lower local content. For instance, the Honda Accord has 70% import content. According to a Mumbai-based car dealer, the more advanced and complex a product is, the more susceptible it is to damage. Besides, most of these cars have run-up claims of Rs 10-15 lakh per car.
High-end cars like the Camry, Corolla and Superb have computer chips embedded in their dashboard, plus sensors. In case of damage, the cars cannot function unless these parts are replaced. Hence, the damages may be very high and it will take a while before the car gets back to the customer.
Meanwhile, car companies are preparing for increased orders after the rains. They have good reason to smile as car sales had fallen for two months in a row in June and July, first due to floods in Gujarat and Maharashtra, and then due to a hike in petrol prices last month.