There is a general lack of collective thinking within dealership community

What are the key issues faced by automobile dealers and how are those being addressed under the aegis of FADA?

The automobile dealership business is facing challenges on multiple fronts and getting less attractive for existing and new entrepreneurs to enter. On one hand, customers’ expectation in terms of service quality and reliability is growing, while on the other hand, manufacturers have not been very helpful, especially during the downturn. Thus, a dealer is getting increasingly squeezed on both sides and has had to deal with very limited headroom and is still expected to deliver on targets and service level.

Few years back, dealers had multiple revenue sources in terms of accessories, insurance and financing options that could be made available at the dealerships depending on customer profile and other parameters. But the scope of earning from these sources is also getting restricted as OEMs are increasingly having a bigger say on these products and services at the dealership level.

Moreover, Government regulations in terms of applicable working standards at dealerships, regulatory compliance, vehicle registrations, land acquisition and development issues continue to be a hurdle. Even infrastructure development, which makes a particular part of city accessible from surrounding areas, is a major problem.  These are local issues that need to be tackled with respective authorities at the State level.
Beyond a point it is very difficult for a national level body like FADA to sort out issues on behalf of dealers at the local level. Being a part of the managing committee at FADA, I and my fellow committee members have been actively trying to promote regional and state level bodies on the lines of FADA, but it is a long process. A major issue with dealership community is that there is a general lack of collective thinking with respect to common problems in terms of business practices, regulations and interaction with OEMs.

How has the automobile sector evolved over the years and what has the evolution meant for vehicle dealers?

The choice available to customers has grown dramatically since the time I began as a dealer four decades back.

Earlier demand for two-wheelers, three-wheelers and cars was always outstripping the supply and there was hardly any effort required to attract customers. But now there is fierce competition and no dealer can afford to get a dealership and take it easy in the hope that customers will come.

What are your future plans?

Our dealership business continues to grow and we expect more customer engagement on multiple channels. We are constantly on lookout for diversifying businesses and may enter into more vehicle categories. We are already selling all four vehicle categories through a clutch of closely-held dealerships in the eastern region. Auto Centre is the oldest dealership for Bajaj Auto two-wheelers and three-wheelers. We also have Tata Motors dealership held separately under Lexus Motors. We are considering diversifying into hospitality and education sector, which have good potential.