Car, bike manufacturers in India need to listen to dealer inputs, says FADA

Keeping the overall industry level in sight, FADA claims, dealers attach a higher degree of importance (27 per cent) on business viability.

By:Updated: Jul 30, 2021 12:50 PM
The domestic sales of passenger vehicles has increased in June, year on yearImage for representational purposes only

The Federation of Automobile Dealers Associations (FADA) has today made some startling revelations. In a survey conducted in association with PremonAsia, consulting & advisory firm, the Dealer Satisfaction Study 2021 points to some interesting insights. Keeping the overall industry level in sight, FADA claims, dealers attach a higher degree of importance (27 per cent) on business viability. After all, if the business isn’t viable then how will the showrooms survive? This makes it a highly critical aspect where OEMs need to exhibit greater sensitivity, particularly since the current satisfaction level on this factor is weak, says the research. Moreover, in the four- as well as two-wheeler segment, dealers reported a higher level of dissatisfaction when it comes to OEMs not listening to their inputs. While it is unclear what these inputs may be, we believe these could be related to the products that should be on offer for higher profitability.

Many two-wheeler OEMs also are said to not buy back dead stock as well as are non-receptive to policy changes. In the four-wheeler mass segment, it was noted that there was a lack of training for the front as well as back end. In the luxury segment, it was noted that training cost-sharing arrangement by the OEMs was unsatisfactory and OEMs’ ability to fulfill vehicle orders with correct specifications and quantity coupled with non-flexibility to choose workshop equipments were the cause of major concerns.

In the Commercial Vehicle segment it was noticed that while OEMs need to handhold dealers in improving sales efficiency & controlling cost of sales, they were quite happy about the overall product range and quality of fully built vehicles. Dealers were also happy as they could directly communicate with OEMs’ senior leadership team for discussing business viability and long term policies.

In the four-wheeler mass market segment, Kia India, MG as well as Toyota hold the first three positions amongst dealers with the highest satisfaction levels. In the luxury four-wheeler segment, BMW India and Mercedes-Benz top the list. As for two-wheelers, HMSI, Hero and TVS form the top three strictly in the same order. Amongst the two three-wheeler maker dealers that took part in the survey, Bajaj Auto came on top whereas Piaggio was a close second. In the truck business, there was no beating VECV’s dominance whereas Mahindra and Tata Motors came in second and third.

FADA President, Vinkesh Gulati said, “FADA’s Dealer Satisfaction Study 2021 was initiated to examine the health of the relationship between Auto Dealers and their OEMs. The survey was undertaken to reflect the prevailing issues faced by the Auto Retail Sector at large, thus making it the true Voice of the Dealers. OEMs need to be cognizant of the evolving dealer expectations. While issues of concern such as dealership viability, support on sales and after-sales, openness to dealer inputs in decision making and designing long term policies are fundamental needs, there are clear signs that dealers expect their respective OEMs to go beyond. For example, there is a need to have technology solutions and analytics to intelligently mine transaction data for business gains. Also, creating a digital platform to measure the effectiveness of marketing expenditure is reflective of a changing mindset.”

Commenting on the achievement Tae-Jin Park, Executive Director and Chief Sales and Business Strategy Officer, Kia India said, “Our dealer partners are our interface with our customers and hence they have a place of high importance in our ecosystem. We have always focused on holistic growth and have taken utmost care of every partner who contributes to the Kia ecosystem we have in the country today. Topping the Dealer Satisfaction Study twice in a row shows our constant pursuit of excellence, our deep engagement with them this year we scored 140 points above our last year’s score of 736. We thank FADA and our partners for recognizing our endeavour, and being a part of Kia India growth journey”

 

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