“As of now the kind of dealerships that we are running, a lot of OEMs are either thinking or already revamping their dealerships. For instance, Mahindra, Hyundai or what Maruti did with the Arena. Similarly, the two-wheeler dealers are also doing it,” says Vinkesh Gulati, president, Federation of Automobile Dealers Association (FADA) at the sideline of the first Finance & Insurance Summit 2022, held in Mumbai.
It is important to understand that the Indian electric vehicle market is going through a huge disruption, with almost every other day a new entrant announcing their foray in the market. Thanks to the low barrier of entry, organisations big and small are trying their hands to grab a piece of the lucrative pie.
But one of the key challenges for the dealer fraternity is to be able to constantly evolve and upgrade their dealerships to be in sync with the OEMs.
Gulati explains that there are two major changes between running an ICE-vehicle dealership versus an electric vehicle dealership. The latter is where you see a tech-savvy sales consultant explaining the specification of an iPhone type of vehicle. Whereas in an IC-vehicle dealership people are looking at the different features in each variant and the discounts available.
“There was a time when customers were enquiring about the vehicle’s cc, torque, 0-60 kph performance, etc. Nowadays, no one talks about it. On the other hand, EV selling is not a problem but maintaining it is,” shares Gulati.
He believes there is a change needed to take place to ensure that the dealerships and salespeople are able to meet the new-age customer requirements.
Fly-by-night brands & challenges
While with new EV brands entering the market, it has become quite difficult to differentiate between genuine companies here for the long run from companies looking to just dump failed products.
It is important to understand that in the electric two-wheeler space there are more than a dozen of players – big and small – and increasing by the day. Of them, especially in the low-speed category which does not need registration, sub-standard products often make their entry unchecked.
The FADA head says for EV dealerships the investment is comparatively low. “For an EV brand (unestablished), a 700-1,000 sqft dealership with 2 vehicle service bay can do the job. But for an IC-vehicle dealership, we don’t see showrooms below 2,000-3,000 sqft. The investment for an EV dealership is much lesser. But the problem here is that the sales volumes are quite low, compared to its IC-counterpart which sells around thousands of vehicles per month,” shares Gulati.
As per estimates for lesser-known EV brands, a dealership can be opened for as low as Rs 10 lakh investment, compared to a few crores required for an IC-dealership. On the other hand, while a handful of IC-dealers are opening up in a month, their EV counterparts are opening and closing in double-digits.
