Home 40th Annual Session Sep 2004   “Customer will have to be the focus of any marketing strategy of automotive business” was the message that came out loud and clear at the 40th Annual Session of Federation of Automobile Dealers Associations (FADA) held on 2nd September 2004 at New Delhi. S Sandilya Chairman & CE, Eicher Group, who was the Chief Guest on the occasion, called upon automobile dealers to focus on ‘ARM’ which, according to him, stood for ‘Acquire’, ‘Retain’ and ‘Multiply’ customers for sustainable business. Vinay Piparsania, VP-Sales, Mktg, Service & External Affairs, Ford India Ltd – the Guest of Honour, said that ‘Evolution and Revolution’ were simultaneously happening in automobile industry and trade. He observed. “Automobile industry is evolving at an unprecedented rate and the life-cycle value equation is changing continuously. The automobile dealerships will have to accordingly change their mindset and practices to keep pace with the changing needs and expectations of customers. The automobile trade will have to live with the shrinking sales margins in this competitive scenario.” Piparsania suggested an integrated model of business encompassing sale of new cars, used cars, insurance, fiancé, spares, workshop operations and other allied business activities for the automobile dealerships for sustaining viability. Since the rapid developments in vehicle design and technology have blurred the product differentiation, it is the distinctive service features and value added services, which would drive the products now on, he added. Responding to the question that the cost of dealership infrastructure and operations had increased manifold, which in turn had put a tremendous pressure on the viability of automobile dealerships, Piparsania said that dealerships would have to take measures aimed at cost reduction in the same way as manufacturers had done to retain competitive edge. Citing an example, he said that automobile dealerships of the same franchise at a place could pool their resources to create common infrastructure, such as a common test drive facility – a measure that Ford India had already initiated. Dr Arindam Bhattacharya, Vice President & Director, The Boston Consulting Group (India), another Guest of Honour on the occasion, emphasised on customer loyalty and ownership by which the automobile dealerships could retain their competitive edge. He said that at the end of ownership cycle, 70 per cent of a customer’s behaviour is driven by his satisfaction with the service. Touching on the importance of owning and retaining customers, Dr Bhattacharya observed that according to a study carried out in Europe, the repeat 3rd purchase by an existing customer brings in 22 per cent more revenue than that generated out of the first sale. Deshnidhi Kasliwal, the outgoing President of FADA in his address said that automobile dealerships cannot afford to carry the baggage of past. They must keep pace with the changing needs and expectations of the customer who is more knowledgeable and demanding than ever before, thanks to the fierce competition in the market and wide choice available to him. Kasliwal added that FADA was alive to the issue of dealer viability in this competitive scenario. As an apex body of automobile dealers, FADA had initiated a number of in-house measures to improve viability and profitability of automobile dealerships. One of the measures taken by FADA was to engage a consultant to conduct systems audit of select automobile dealerships of cars in north India, to start with. The study would aim at finding deficiencies in the operations of these dealerships and improving their efficiency and profitability. General findings of the study would also be published in FADA Journal to enable the automobile dealerships spared across the country to take corrective measures before the situation gets out of control. Prem Bagga, President, The Automobile Traders Association Delhi, welcoming guests and participants at the Annual Session said that the spectre of large-scale dislocation of automotive business arising out of Supreme Court order for closure of automobile workshops operating in non-conforming areas was looking large over the automobile dealers in Delhi. He said that the world over, the automobile workshops and service stations are located in and around residential areas. The automobile repair and service, being utility in the interest of promoting clean environment. Shifting of these workshops to far-flung area would create more problems of traffic congestion and environment pollution, thereby defeating the very objective for which these workshops are sought to be shifted/closed. Jayendra Kachalia Takes Over as President of FADA Later during the day, at a Council Meeting held immediately after the AGM, Jayendra Kachalia, Director, Navnit Motors Pvt Ltd, Mumbai was unanimously elected President of FADA for the year 2004-05. J Kachalia - a B Com (Bombay University) and a Chartered Accountant, as a Director in the company, is responsible for the group finance and is also in-charge of its Maruti division in Thane-Mumbai. He has been the Chairman, Automobile Dealers Association of Maharashtra, a founder member of FADA, since 2001. The company managed by the Kachalia family has blossomed over the years and is currently operating a number of dealerships, viz. Eicher Motors for commercial vehicles, Maruti Udyog &, BMW for passenger cars, and, LandRover for SUVs. Besides automobile business, the Group owns a finance company & a software company. In keeping with its objective of providing mobility to customer on land, water and air, the Group has also diversified into marketing of yachts & speedboats and business Jets aircrafts. Since its inception, the Navnit Group has handled dealerships right from 2-wheelers, 3-wheelers to 6-wheelers. This includes the dealerships of TVS, LML, Greaves, Premier, Ford Trucks, at one point or the other. In addition to its presence in Mumbai, the Group has branches at Rajkot in the State of Gujarat and at Bangalore in Karnataka. The Navnit Group enjoys a very high reputation within the industry. The hard work put in by Kachalia brothers has earned them many coveted medals for their excellence in Sales, Service and overall Management year after year. At the same meeting, Vinay R Saboo, operating dealerships of Maruti Udyog's passenger cars and Kinetic Engineering's two-wheelers in Hyderabad under the names - Saboo Enterprises and RKS Motors Pvt Ltd, was unanimously elected Vice President of FADA for the year 2004-05. Saboo was the Chairman, South Zone, FADA during the year 2003-04. He has also been the Chairman of Andhra Pradesh Motor Vehicle Dealers Association - an Association Member of FADA, in the past. Saboo has been in the automotive business for the last 30 years. He is No.1 single city dealer for Maruti Udyog Ltd in Andhra Pradesh and among the top 5 dealers of Kinetic Engineering & Kinetic Honda in the country. Saboo, a member of Advisory Committee of Maruti Udyog Ltd is credited with the creation of the Best Maruti Showroom in India.