The Changing Face of Automotive Retailing David Friedman, Managing Director & President, Ford India David Friedman The David Friedman is Managing Director and President of Ford India. He started at Ford Motor Company 18 years ago, joined Ford India as Vice President in 1998 and became the Managing Director and President in 2001. Under his leadership, Ford India has achieved several milestones: a doubling of its domestic sales volume, becoming a leading automobile exporter from India, the first Indian automobile company to commence exports to China, the localisation of Ford’s Ikon power train in a strategic business alliance with Hindustan Motors and introducing of the successful models like the Ford Ikon Flair, then Ford Endeavour and now the new Ford Fusion. As Managing Director, David has focused Ford India on continuous product innovation, responsive customer care and relationship management backed by a viable business structure as the keys to its growth in the Indian automobile industry. Earlier, as Vice President – Finance and Systems at Ford India, David was instrumental in developing the business model for the company’s operations. Whilst leading the finance function at Ford India, David had a key role in establishing Ford Technology Services India, the hub for Ford’s IT and engineering initiatives in India and the Asia Pacific region. David joined Ford Motor Company as a financial analyst at the Dearborn Engine Plant in the Ford Rouge Complex at Dearborn, Michigan, USA. Prior to assuming his responsibilities at Ford India, David was Finance Director of Ford Vietnam Ltd. His other roles at Ford include Program Manager, Ford Motor (China) Ltd and a variety of management positions at Ford Truck Operations and Vehicle Operations that focused on product planning, business strategy, finance and systems. He holds a bachelor’s degree in International Relations from Georgetown University and an MBA in Finance and Economics from the University of Chicago.

Anticipation of customer needs is the key to any successful retail marketing. This is especially true today with the easy availability of product information creating customers who are more knowledgeable, sophisticated and less loyal to specific brands. Telecommunications are putting us all in touch with everyone, anytime, anywhere in the world. Added to this, economic progress, rising prosperity, urbanization, consumerism and media proliferation are resulting in a competitive environment which places customers in the driver’s seat of the sales transaction. Fuel retailing in India is an example to illustrate an industry developing to stay ahead of customer’s needs. Referred to simply as the petrol pump earlier, today these fuel outlets resemble a tiny township. The services offered, far exceed simple fuel assurance. Attention-grabbing designs and signage at these retail outlets signal the offering of services that include speedy delivery of branded multi-product fuel, multi-mode payment facilities, cyber cafes, automated teller machines, auto-car washers, convenience stores, customer lounges, food courts and more. Select brands also offer cashless transactions through co-branded cards to enhance convenience and to offer extended value to the customer. The Indian automobile industry is one of the few in the world that is demonstrating double-digit annual growth. Along with the receptive economic mood, there is an explosion of new vehicles with more value and features than ever before. As the market grows in size, one is also witnessing a blurring of conventional segmentation and emergence of newer, multipurpose model types designed to address the consumer’s changing aspirations and usage patterns. As they mature, the Indian automotive customers have also taken advantage of the internet has played its part in making the buyer more astute. Shoppers can now choose the vehicle model, colour, specification, financing package and can almost wrap up the purchase decision online. With so much available at the click of a mouse, it is also not surprising that customers are now becoming as informed as the sales staff at dealerships. But, the mouse does not provide the touch, the feel, the relationship which a dealer can uniquely provide. In this new market scenario, the customer clearly is the winner. He or she in being wooed by a plethora options, offers, promotions and experiences. Marketers are working furiously to enhance the customer experience at every touch point. Yet, unquestionably, the dealership facility remains the most crucial touch point between the brand owner and its customer in the business of selling cars. Customers are demanding a diverse set of deliverables from their dealer. Rating criteria for a dealership facility in the JD Power study includes the convenience of location, hours of operation, appearance of the facility, the neighbourhood, comfort of transactions, ease of viewing and selecting vehicles, availability of product information, a pressure free environment and an inviting & friendly layout. An analysis of the recent JD Power report indicates that automobile dealers in general are doing more to enhance the buying experience. For automotive retailing to be effective, these criteria and the scores indicate that dealerships require a dynamic focus on fulfilling and exceeding customer needs and expectations. As the demands increase, the customer has the prerogative to decide what to buy, how to buy it, and from whom to buy. Customers will soon make the same demands for efficiency and quality from dealers as they do of automakers. Those dealers with effective communication with customers throughout the vehicle ownership cycle will gain an advantage. Everything offered at a dealership from used car sales and new car purchase, to service and finance and insurance has to be oriented for the customer’s benefit. To romance the customer, dealers will need to build loyalty through improved employee management sills. Staffing is a critical factor in the success of any retail organization. Retail staff represents the face of the brand and they need to be empowered with product knowledge and have to deploy a host of verbal and psychological techniques to motivate customers into buying. To create a service orientation, an employee needs to be provided with on-the-job training as well as interpersonal on an ongoing basis. Motivation of employees involves empowering leadership responsibilities to the team, setting goals for them and maintaining their morale. Motivated employees ultimately add to the bottom-line! Automotive retailing in this decade will continue to be heavily dependent on information technology. One has to learn to own customer data and extract information from it. Learn to mine it and maximize it. To sustain and improve performance, dealers will need to convert their repository of information into a competitive advantage to optimise operational efficiency. For example, dealers will now have to make well-informed decisions about what to stock rather than depend on intuitive judgement. One will have to formulate sales strategies based on what customers want to buy rather than the traditional way of managing to sell what is in inventory. To survive, compete and prosper in today’s new economy, manufacturers and their sales channels must shake off passive habits and practices and visualize and implement revolutionary ways to sell cars. We must be open to new ideas, new ways of doing business. For a vehicle manufacturer, that means flawless quality, more value, enhanced safety, better fuel efficiency, environment friendly, enhanced friendly, affordable new technologies and more excitement. The operative word is more, and more of everything at a price that represents real value to customers. For automobile dealers, this environment demands, providing matchless customer satisfaction. Customers need to enjoy the vehicle buying experience, not just tolerate it. The focus of all business processes has to be the end satisfaction and convenience of the customer. Brand franchisees can also explore consolidation of services to stay competitive and improve levels of delivery. Centralised location for test-drives and a common database for used cars amongst brand franchisees in a region could be interesting services to innovate an enhanced experience for the customer. At Ford India, we have initiated a wide range of programs, products and services designed to make Ford owners among the most satisfied motor vehicle owners in India. “Brand@Retil” is the corporate identity program from Ford designed to increase customer satisfaction and to ensure a superior brand & purchase experience. This program provides consistent representation of the brand’s identity across its retail level. The primary objective is to reflect the essence of Ford in the retail environment. All our dealership facilities will soon have the Brand@Retail environment and will compare with any other international Ford dealership experience. Brand@Retail is transformational and innovative. Earlier this year, Ford India launches ‘Ford CarGainz’ – an innovative customer loyalty program in the automobile industry exclusively designed for the Ford vehicle owner. A customer loyalty programme that rewards servicing, maintenance of Ford cars and purchase of Ford gear from Ford authorized dealers and service centres. ‘Ford CarGainz’ is a first of its kind initiative by an auto manufacturer in India, and demonstrates Ford’s strong focus and commitment to the customer. ‘Ford CarGainz’ rewards all customers who follow Ford guidelines on routine services through authorised Ford dealerships. This initiative also seeks to educate the consumer on the risks they incur by the use of non-genuine spare parts and unauthorised service centres. CarGainz will benefit Ford car owners immensely by encouraging them to maintain their car as per prescribed frequencies thereby getting the best performance from their vehicles and earning a higher value at resale. Another new initiative launched across all Ford dealerships in India, is the “Total Maintenance Plan”. It is a new service plan covering both scheduled and non-scheduled servicing including mechanical and electrical repairs. It was designed to minimise concerns on cost of ownership of the vehicle and in the long run, help owners earn a higher resale value. A car represents a significant value purchase made by a customer. Auto majors and their dealers are expected to sell and service these increasingly complex products through world-c lass facilities and well-trained professionals. The market in India is rapidly changing, becoming more connected and competitive for both products and services. It will never again be “business as usual” at an auto dealership. The business of selling and servicing cars has entered a dynamic phase, packed with new opportunities for the enterprising lot!