Dealer Satisfaction Survey 2006

Mahindra & Bajaj top Dealer Satisfaction Ratings

TNS Automotive

On the canvas of the Indian economy, the automobile industry occupies a prominent place. Due to its deep, forward and backward linkages with several key segments of the economy, the automobile industry has a strong multiplier effect and is a driving force behind the buoyant Indian economy. Demand for both four wheelers and two wheelers have simply exploded over the past few years, owing to the flurry of new model launches, competitive pricing, affordable financing options. In such a competitive scenario, it has become critical for manufacturers to identify measures and monitor changes in the expectations of key stakeholders in the business and map those vis-à-vis their performances. This is key to developing a base of not only loyal customers, but also a base of committed channel partners who would, in turn, be the drivers of growth for the companies.

 
Automotive Dealers form an integral link between manufacturers and customers and have a unique position in managing them during the sales and after-sales experience. It is generally observed that manufacturers who meet the expectations of their channel partners are in a better position to meet the end-customers' satisfaction as well.

To understand which manufacturers are doing a better job of this than others, TNS Automotive recently conducted a Dealer Satisfaction Survey (this is the third edition of the study). This study provides critical feedback to the industry on dealer expectations and commitments towards manufacturers. The 2006 DSS attempts to understand these parameters and how they have changed with time. The study gives every manufacturer an index score, which measures the strength of its relationship with their dealers on a host of attributes.

 
The study covers a large cross-section of dealers across different vehicle segments. The dealerships covered provide a representation of dealers from metros, large cities and relatively smaller cities.

Significantly in 2006, the two wheelers dealers' satisfaction score has recorded a jump after dropping in 2004. The four-wheeler category continues with the positive trend and has gone up by 2 points. Another change in the 2006 DSS is that homegrown companies have displaced multinationals from the top rankings. This year, Mahindra and Bajaj dealers have put their respective companies at the top of the rankings with significant improvement in points for Mahindra.

In the 2006 DSS study, the manufacturers' performance with respect to the overall delivery on product itself has pushed up the satisfaction levels of the dealer fraternity. The key driver in this segment is the quality of products being offered along with the speed with which the manufacturers are aligning their products with the market. Dealers are also satisfied with the timely delivery of the vehicles along with the order planning of the manufacturers but expect timely communication in case of delays.

Dis-satisfaction sets in when it comes to sales and marketing process. Dealers feel that the advertisements are not relevant to their customers and are also not in the local language, which reduces their efficacy. Other nagging areas are the lack of support in case of local events and the financial burden of marketing activities such as joint advertising and cost of POP materials. Also, dealers expect their principals to be more concerned about their profitability and assist them by providing guidance/support in improving their business performance. They also need to be more receptive to dealer inputs and suggestions.

Says Pradeep Saxena, Senior VP, TNS Automotive, "Dealer sentiment is a strong endorsement of the manufacturer's strategy and reflects the confidence in future prospects. For the first time, homegrown Indian companies have displaced the multinational automotive companies from the top, ever since TNS Automotive started measuring the Dealer Satisfaction in India way back in 2002. This is a reflection of progress made by Indian manufacturers in developing a strategy to keep their dealers motivated. Dealers feel that manufacturers are not concerned about their profitability and there are some sore areas like Order and Delivery delays, Sales & Marketing support, relationship with the sales staff, etc. Two wheeler dealers have shown concern towards fairness of franchisee terms, fairness of reward and recognition and implementation of dealer suggestions."

Dealers being independent business owners have the innate desire to deal with the top management in their principal organisations. Whereas Hero Honda is unable to meet these expectations, TVS is meeting these moderately. In four wheelers, Maruti meets this moderately but Tata Motors meets it well.

Mahindra dealers are an especially buoyant lot and have rated their principal highly on the areas pertaining to timely delivery of vehicles, fairness in contribution to joint advertising, implementation of dealer suggestions and fairness of dealer rewards. The high satisfaction of Mahindra dealers in the areas of sales and marketing process increases their index scores greatly as compared to the overall four-wheeler dealer fraternity.

In the two-wheeler segment, Bajaj Auto leads the pack with their dealers extremely satisfied with the kind of products the company has been introducing in the recent past. The fact that most of the launches have performed very well in the market further spurs the upbeat mood of the dealers. However, even Bajaj dealers would like the manufacturer to be more receptive towards their inputs and expect to be guided and supported in improving their business performance.

The enhanced satisfaction of Mahindra dealerships is also driven by the recent new alliances that are propelling the company in the league of passenger car business. This is a total shift for the organization from its traditional image of utility vehicle maker. Similarly for Bajaj, the sheer performance of all the recently launched models is a significant contributory to its dealer satisfaction index.

The study reveals that, overall four-wheeler dealers are more satisfied than the two-wheeler dealers. However the equation reverses in case of dealers based in Metros. This pattern is common with the satisfaction on Profitability. The industry scores for the two-wheeler and the four-wheeler dealers are 73 and 81 respectively. Industry has performed well on measures of Product & Processes. Four-wheeler dealers treat latest technology and high quality products from manufacturers as a given.

Does a set of satisfied dealers ensure satisfied customers?

It has been observed that the end-user satisfaction is guided by the performance of all the stakeholders in the entire chain. This includes the manufacturers, dealers, and dealer - employees, to name a few. TNS Automotive also conducts studies on overall customer satisfaction and Dealer Employee Satisfaction.

Combined analysis of these studies reveal that there is a strong linkage between the dealers & the end customers' satisfaction levels. However there exists even a stronger linkage between the dealer - employee and the end users' satisfaction. This is primarily because the dealers' employees ultimately face the customers and are responsible for delivering a satisfying experience.

The results of Dealer - employee satisfaction studies conducted by TNS Automotive for automobile companies in the country have been revealing on the above-mentioned aspect. One of the key findings from these studies show that a large proportion of the dealers' employees are neither satisfied nor committed to their respective organisations. Therefore, the challenge for the dealers lies in transforming these employees into business drivers.

Dealers and end-consumers are the two main stakeholders in automotive business and a manufacturer’s marketplace success is driven by its ability to manage expectations of the both. The manufacturers who are able to keep their dealers motivated stand a better chance of achieving a high satisfaction among end customers.