Only 15% of dealers anticipate a loss, the lowest percentage in the study’s history.
More than half of all dealers across the three largest vehicle segments in India—passenger vehicles (PV), two-wheelers and commercial vehicles (CV)—express confidence for a profitable financial year as customer-buying sentiment continues to improve, according to the JD Power 2017 India Dealer Satisfaction with Automotive Manufacturers Index (DSWAMI) study released on Thursday. “Over half (58%) of all PV dealerships in India expect to generate a profit in fiscal year 2017, up from 49% last year. Only 15% of dealers anticipate a loss, the lowest percentage in the study’s history,” it noted. In addition to extending financial support to their dealers to ensure their viability, automakers are making efforts to improve their systems, resulting in fewer delays and discrepancies. In 2017, 22% of dealers indicate they have not experienced a delay in vehicle delivery, up from 16% in 2016.
“It is encouraging to see that automakers are dedicated to enhancing their systems so that information can be relayed without error or delay,” said Shantanu Nandi Majumdar, director at JD Power. On two-wheelers, it found that dealer satisfaction with manufacturers averages 780 (on a 1,000-point scale), with 54% of all two-wheeler dealerships expecting their financial performance this year to be better than the previous year, and half expecting to be profitable. “However, nearly one-fourth (24%) are disappointed with management’s concern regarding dealer viability and 78% believe manufacturers need to improve relations with dealers,” it noted.
As far as CVs are concerned, across the nine factors that compose the index, satisfaction with product ranks highest among dealers at 806. “Nine out of 10 dealers indicate that the manufacturer has the range of vehicles to compete effectively in the market,” it found. However, “marketing and sales activities, a key factor in the study, has the lowest overall score in the study with one-fourth of CV dealers indicating they are disappointed with the variety of sales promotions (26%) and reasonable dealer advertising allowance (27%).”
“As 2017-18 gears up for new model launches, face-lifts and new variants across the three vehicle segments, savvy and effective marketing strategies will be key to higher sales and enhanced brand image,” Majumdar added. “With more and more touch-points in the purchase journey becoming digital, the next few years are likely to see a sharp rise in digital marketing spend by manufacturers.” Into its seventh year, the India DSWAMI study measures dealer satisfaction with vehicle manufacturers or importers in India, and identifies dealer attitudes regarding the automotive retail business. Dealerships of two-wheeler and CV manufacturers in India are covered for the first time in the 2017 study.