FADA Council & Regional Meetings at Ahmedabad

Looking Back at the Year Gone By

Council and Office Bearers for the Year 2007-08

The Council for the year 2007-08, constituted afresh at the previous AGM elected Mr Pradip R Kamdar and Mr S P Shah as President and Vice President, respectively, for the year 2007-08. Mr Nikunj Sanghi and Mr Ashish M Gupta were unanimously elected Hony Secretary and Hony Treasurer, respectively.

The new Council continued on course charted by the previous Council, ably headed by Mr Binod Agarwal. The Council also embarked on a few new initiatives for the benefit of retail automobile trade. It is a matter of satisfaction for the Council that the activities undertaken by FADA made a steady headway. Important activities and events during the year under report are as under:

Council Meetings

Council during the year held 5 meetings at Chennai, Mumbai, Delhi, Ahmedabad and Delhi in that order. The objective of rotating the meetings was to meet members in various parts of the country and to understand the scenario at the local and regional levels for appropriate action.

43rd Annual Session of FADA

As per the past practice, 43rd Annual Session of FADA was dovetailed with the previous AGM held on 21st Sep'07 at Hotel GRT Grand Days, Chennai. The distinguished guest speakers at the 43rd Annual Session were: Mr K K Swamy, the then Dy Managing Director, Toyota Kirloskar Motor Ltd; Mr R Thiagarajan, Chairman, Shriram Group of Companies; and Mr C P Singh, Special Commissioner & Transport Commissioner, Govt of Tamilnadu.

At the 43rd Annual Session, the portrait of Late M Ct Muthiah, Past President, FADA was unveiled by Mr Binod Agarwal, the then President in the presence of Mr Sharath Vijayaraghavan, the then Chairman, MV&AIA and other guests & participants.

Auto Summit 2008 - 5th Mega Biennial Convention of Automobile Dealers

FADA has been organising biennially a convention of automobile dealers - Auto Summit commencing from the year 2000. The 5th Auto Summit 2008 was held on 14th & 15th, January 2008 at Hotel Le Meridien and Hotel Ashok, New Delhi on the theme: "Auto Retail: Challenges of Sustaining Growth and Keeping Pace". The event was organised in association with SIAM, and was timed with Auto Expo as in the past.

The programme of Summit spanning over two days witnessed engrossing deliberations on variety of subjects, including the key challenges of managing and sustaining growth, managing change, human resource management, dealership viability and host of other issues of concern to automobile dealers. The convention also mulled new business opportunities for automobile dealerships.

Dr Ashwani Kumar, Hon'ble Minister of State in the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India inaugurated the Summit and delivered the inaugural address. The impressive array of guest speakers comprised "Who is who" of automobile industry, including Mr Ravi Kant, President, SIAM & MD, Tata Motors; Mr R Seshasayee, Past President, CII & MD, Ashok Leyland; Dr Pawan Goenka, Vice President, SIAM & President, M&M Automotive Sector; Mr R C Bhargava Chairman, Maruti Suzuki India; Mr Madhur Bajaj, Vice Chairman, Bajaj Auto; Dr Wilfried Aulbur, MD & CEO, Daimler Chrysler India; Mr Rajiv Dube, Sr Vice President - PCD, Tata Motors; Mr Karsten Bogun, President & MD, Skoda Auto India; Mr Rajesh Jejurikar, MD, Mahindra Renault; and Mr Joerg Mueller, President & MD, Volkswagen India, and host of other leaders of industry.

In addition, a galaxy of speakers representing allied businesses, international organisations, academia and media added their perspectives to the discussion. Among the eminent speakers who addressed and interacted with the participants were: Mr V Vaidyanathan, ICICI Bank; Mr Sanjay Chamria, Magma Shrachi Finance; Mr Albert Gallegos, National Automobile Dealers Association (USA); Mr Craig Cather, CSM Worldwide, Germany; Mr Marc Cabeza, GNFA, France; Mr Kieran Godwin, Inchcape, UK; Mr Austin Ligon, Co-Founder & Ex-CEO, CarMax, USA; Mr Manish Jar, Idea7 Automotive; Mr Vinay Sanghi, CEO, FirstChoice; Prof G Raghuram, IIM, Ahmedabad; Mr Pawan Jain, CMD, Safexpress; and Mr Adil Jal Darukhanawala, Mr Hormazd Sorabjee & Mr Ajay Bhatt - representing media.

The Summit was not all about business alone. A gala Musical Evening, at which Amit Kumar and Sumeet Kumar - son and grandson of Late Kishore Kumar enthralled the audience with their lively performance, marked the grand finale.

The Summit has become an important platform where manufacturers and dealers representing cross-section of industry and various segments of motor vehicles brainstorm the whole gamut of current and the emerging scenario. The discussion becomes all the more meaningful with other stakeholders, namely the Government, think-tank, allied businesses, media and transport operators participating to give their perspective.

Regional Meetings & Open House Sessions

Regional Meetings and Open House Sessions were organised at Kochi, Mumbai and Ahmedabad with a view to reaching out to members in various parts of the country and identifying the problems & issues facing automobile dealers at the state and local levels.

The meetings provided an opportunity of interaction with the Government authorities, representatives of automotive industry and others connected with automotive business.

Industry Relations

FADA continued to work in partnership with industry and all other stakeholders for sustainable growth and development of automotive business as a whole. Dialogue with SIAM, CII, ASSOCHAM and FICCI on host of issues including sales tax on warranty parts, gray areas in service tax, dealer viability and absence of provision for automobile dealerships with 3-S facility in the land use planning of major cities, was carried on.

Interaction with the Government

FADA continued to have a regular interaction with senior officials of Government at the Centre and States to sensitise them on the following issues in particular -

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Non-uniformity in provisions and rates of VAT on motor vehicles across States;

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Sales tax on warranty parts;

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Confusion and legality of service tax on the amount received by automobile dealers from NBFCs and banks for arranging vehicle finance on behalf of the customers;

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Rationalisation of excise duty on motor vehicles,

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Delegation f registration of vehicles to Automobile Dealers and dispensing with the requirement of physically taking the vehicles to RTO's for inspection, particularly when the new vehicles are already type-approved and certified by national test agencies for compliance with the provisions of Motor Vehicles Act and Central Motor Vehicle Rules;

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Uniformity in registration procedures and taxes

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Putting in place an effective Inspection & Certification programme for in-use vehicles including non-transport vehicles; and

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Provision for Automobile Dealerships with 3-S facility in Land Use Planning & Development in major cities.

Representations to the Government Authorities

FADA made a number of representations at the State and Central levels on various issues affecting auto retail.

FADA also submitted its Pre-Budget and Post-Budget Memoranda to Union Ministry of Finance, Ministry of Heavy Industries, FICCI and ASSOCHAM.

In addition to the meetings and interaction with Transport Authorities in various States, FADA submitted its suggestions on issues relating to motor vehicle taxes & registration procedures, as also on other matters affecting Motor Vehicles Act/Central Motor Vehicle Rules to the national chambers namely, FICCI and ASSOCHAM for being taken up with the appropriate authorities.

International Relations

One of the positives that came out of Auto Summit 2008 was the deepening of FADA's relations with NADA. Mr Albert Gallegos, Director - International Affairs, NADA came to interact with the participants at the Summit. His presentation and interaction with the participants at the Summit were revealing and quite useful. NADA has offered to hold a workshop on India at the NA JA 2009 Convention. NADA has further offered their assistance to develop competence within FADA to evaluate and track used car prices. In addition, NADA has also proposed to organise a mini training programme for automobile dealers visiting NADA Convention in 2009.

There was a flurry of activity with regard to international relations. Two foreign delegations from France and Netherlands visited Delhi on 7th April and 11th April 2008, respectively and had interaction with FADA representatives.

Mr Rakesh Jain, Past President, FADA made a presentation to the French delegates comprising automobile dealers and representatives of banks engaged in auto finance business on 7th April at the French Embassy on auto retail scenario in India, which was followed by an engrossing interaction.

After the interaction, the French delegation members visited three dealerships in Delhi. The delegation members also visited two dealerships at Mumbai subsequently on 10th April 2008.

On the heels of meeting with French delegation, FADA representatives had an interaction with a delegation from Netherlands on 11th April 2008 at Hotel Taj Palace, New Delhi. After a presentation by FADA, a workshop was organised at the same venue, which provided an opportunity for the representatives of FADA and Dutch delegates to share their experiences. Mr Rakesh Jain, Mr Prem Bagga, Mr S P Singh, Mr Manu Jain, Mr Bimal Jain and Mr Gulshan Ahuja represented FADA at the workshop.

The proceedings at the workshop started with Mr Paul De Voijs, President & MD, Volvo Car India giving an overview of his experiences in India and the business environment prevailing in this country.

The discussion with Mr Albert Gallegos as well as French & Dutch delegations brought forth a great deal of information with regard to auto market, especially the car market in America and Europe. Two major revelations that came to the fore during interaction are: (i) Gross sale margins in Europe and America range between 8% and 15%, the net margin retained being about 3-5%; (ii) Used car sales activity is an integral part of automobile dealership business and a major component of their income and profitability, sale margin on used car being around 20%.

Mr Albert Gallegos of NADA, as also the French and the Netherlands delegations invited FADA office bearers and other members to visit their countries. FADA would like to build on these visits and strengthen relationships with their fellow dealers in the USA, France and Netherlands through regular exchange of information and visits.

The fact that foreign delegations visiting India now make it a point to have interaction with Indian automobile dealers goes to show that the Indian growth story has aroused a great deal of interest worldwide and that FADA as a body of automobile dealers is getting increasing attention and recognition.

10.

Major Initiatives

(i)

FADA Helpline

Having regard to the growing complexities of automobile dealership operations, a service viz. 'Helpline' had been started by FADA in November 2005. The 'Helpline' service aims at helping FADA members with the practices, legal positions and clarifications on various issues relating to taxation, environment laws concerning vehicular pollution and workshop operations, procedures & provisions contained in Motor Vehicles Act/Central Motor Vehicle Rules and vehicle registration taxes. This initiative of FADA has attracted a large number of queries from members on various issues. President, Director - Helpline and FADA Secretariat have tried their best to clarify all such queries to the satisfaction of members.

(ii)

FADA Academy Programme

Keeping in view the widespread shortage of trained manpower suiting the needs of automobile dealerships and their workshops, FADA had taken en initiative to conduct training courses in association with reputed institutes in different parts of the country. The Academy Programme did not pick up much momentum during the year.

However, the efforts are being made to revive the programme through a fresh tie-up with Idea7 Automotive.

11.

FADA Journal

Monthly publication "FADA Journal" continued to grow in terms of quality, content, popularity and circulation. The contents of Journal, in particular, evoked appreciation from automobile dealers and others connected with automotive business, for their substance and usefulness.

12.

Media Coverage

FADA's activities and concerns were widely covered by the national & regional media from time to time.

13.

Membership

FADA's membership strength as at the end of Council Meeting held on 5th July 2008 at Ahmedabad stood at 1407.

These members, most of whom owning multiple dealerships represent more than 70% of the retail automobile trade in the country.

Details of various categories of members on FADA's Rolls:

Founder Members	:	4
Association Members	:	17
		21

Other Members i.e. Individual Members, Life Members, Supporting Members

Region	Individual Members	Life Members	Supporting Members	Total
East	191	49	2	242
North	323	60	6	389
South	263	63	9	335
West	336	63	19	418
Foreign	2	-	-	2
Total	1115	235	34	1386

14.

FADA Secretariat

Secretariat of FADA continued to function from Its own office premises located at 805, Surya Kiran, 19 K G Marg, New Delhi - 110 001. Efforts are being made to further strengthen the Secretariat with a view to providing more services of substance to the members in keeping with the growing membership base and their ever-increasing expectations as well as changing dynamics of retail automobile trade.