FADA: Auto dealers looking at rationalisation of infrastructure, manpower

In order to keep business sustainable, FADA is also talking to auto companies to keep inventory in check during the festive season this year in order to avoid over stocking

auto sales fada

Auto dealers are looking for rationalisation of their assets as well as manpower, especially in bigger cities, to tide over challenging business environment, says apex body of auto dealer association FADA.

The auto dealer body said the stress is more on dealerships in the bigger cities right now due to the prevailing situation as compared with outlets in the smaller towns and rural areas. “Dealers are looking at moving to smaller places with relatively low rent and also looking at rationalisation of manpower in order to carry forward in these challenges times,” said FADA President Vinkesh Gulati.

In order to keep business sustainable, FADA is also talking to auto companies to keep inventory in check during the festive season this year in order to avoid over stocking at dealer-end as witnessed in the last two years, he added. Kia Motors and Toyota Kirloskar Motor met expectations of their dealers better than other companies in the passenger vehicle segment during the COVID-19 lockdown, FADA said.

FADA in the month of July-August had conducted a survey, in association with PremonAsia, on support given by OEMs (original equipment manufacturer) to their Dealer Partners for COVID-19.

“Even before COVID-19 pandemic hit us, the Indian automobile industry was grappling with a prolonged slowdown. In fact, we were already de-growing for 15 odd months. Against this backdrop, COVID-19 outbreak has been a significant blow to the auto industry and especially to auto dealers,” Gulati said.

Many OEMs came forward during these testing times and offered support to dealers with various means. FADA hence undertook this survey, he added. “Our findings showed varying degrees of difference. While some dealers were better off, some received almost nothing in such trying times. It hence became very essential for FADA to gauge how the principals treated their channel partners, their first customers,” Gulati said.

Elaborating on key findings of the survey, PremonAsia Founder and CEO Rajeev Lochan said all segments of the market have recorded a weak satisfaction score below 600 which is understandable given that no one can be prepared in advance for handling such a calamity.

The survey was conducted with a sample size of 1,144 dealership outlet from July-August 2020. “However, OEMs like Kia Motors and Toyota Kirloskar (for passenger vehicle segment), Audi (luxury), Hero Motocorp (two-wheelers) and Mahindra (CV small and light) have met expectations of their dealers relatively better than others,” he added.

Lochan noted that 46 per cent dealers had two biggest concerns — support towards future business evolution and support towards re-starting business post lockdown. “Also, what came out commonly across all the verticals was that dealers expect OEMs to improve their profitability,” he added.


Data Sovereignty and Cybersecurity

Data Sovereignty and Cybersecurity

Key Promoter Considerations- Foreign Investment In Indian Startups

Key promoter considerations: foreign investment in Indian startups

Pre-owned Car Industry

Can used car market accelerate recovery for the Indian automotive sector?

Cloud kitchens in India - Will the new recipe revitalise the restaurant industry

Laying your table from the cloud: Cloud kitchens are here and reviving restaurant industry

Vinod Tiwari_NITI_AAYOG

Innovation and entrepreneurship are the game changer for new-age India: Vinod Tiwari, Regional Mentor – Gujarat, NITI Aayog

textile industry

More uncertainties for textile industry amid escalating global trade tensions

credit growth

Overall credit growth continues to be muted: FinMin report


Women in corporate boardrooms: moving beyond tokenism

work from home stress

Two in five Indian professionals stressed due to remote work


Indian CEOs less confident about economic growth

Farm Reforms Bill 2020-Will it Get Rid of Middlemen or is it an Anti-farmer Propaganda

Farm Reforms Bill 2020: Will it get rid of middlemen or is it just an anti-farmer puffery?

One District One Product scheme-A step towards becoming manufacturing powerhouse

One District One Product scheme: A step to make India a manufacturing powerhouse