FADA Group 20, later modified as to Group 10 also (for more effective working), is designed for dealers who mean business. Group 20 meetings take a hard-nosed, no-nonsense look at improving profitability, management skills and problem solving. All the meetings focus on improving the bottom line. Members are drawn from non-competitive dealerships (in the same market) and they discuss common problems, exchange ideas and analyse data. This gives an opportunity to compare one’s dealership performance with fellow dealers and against franchise benchmark data.

Once this experiment works well, more such Groups can be formed in different regions for ease of meeting more frequently, and also to lower costs of the meetings.

FADA G-10 Program: Implementing Best Practices in Dealership Management

The automobile dealership business in India has been undergoing a rapid transformation over the past few years. The entry of leading automobile MNCs and a slew of model launches expanding the product range and inventory of dealership has increased complexity in the dealership business. The twin forces of increased competition (large number of dealership points as well as emerging alternative channels) and a higher customer expectation is forcing dealerships to look at their business afresh. The old ways of managing dealerships would need to change if dealers are to add value to the sales and service processes and protect their margins. Greater process orientation and innovation in critical business functions is the need of the hour.

FADA has initiated the G-10 Program to help dealers learn and implement innovative business practices. This initiative is modelled on the highly successful G-20 Program of NADA (National Automobile Dealer Association) of USA. The concept is based on shared learning and transfer of knowledge, systems and processes within a participating group. The idea is to generate and implement ideas, which would improve dealership management and turnover/profitability.

The group comprises dealers of leading OEMs in the Passenger Car/UVs category – hence, there is increased learning and cross-fertilisation of ideas. It has been ensured that dealership owner’s/CEO’s time is suitably leveraged for understanding possible areas of improvement and implementation of the same.

Avalon Consulting, an Indian Management Consulting firm, is involved in facilitating the exercise. Its consultant team is coordination the entire exercise in terms of:

▪	Developing standardised data formats.
▪	Setting the agenda with participating dealerships.
▪	Discussion and facilitating data collection at participating dealerships.
▪	Analysis of data to identify and innovate ideas and best practices and areas of improvement.
▪	Developing the improvement plan for each dealership.
▪	Monitoring and facilitating the implementation plan at each dealership.
▪	Documenting and quantifying the improvements achieved by the program.
Participating dealers would get to share and learn from innovative ideas on dealership management practices. For example:
-	Sales: Initiatives for increasing revenue streams, innovative tie-ups with external agencies, salesman efficiency, etc.
-	Services: Improving additional revenue streams, innovative service marketing campaigns, etc.
-	Parts: Innovative parts pricing policy, ideas on disposal of dead stock.
Eleven dealership are participating in the first round of the program, while more dealerships have shown interest in enlisting. At present, the OEMs include M&M, Honda, Tata Motors, Hyundai, GM, Mitsubishi, Toyota and Maruti. First round of discussions/meetings have been held at four dealerships and further meetings at the remaining dealerships are in progress. The entire exercise including data collection, analysis, integration of learnings and communication of best practices, is expected to be completed by October end. The implementation of these ideas at respective dealerships would commence November onwards. First Learnings Based on Avalon Consulting’s preliminary meetings at four dealerships, certain unique and innovative practices have been unearthed. Ideas/Learnings on Sales Management
▪	A focused lead generation process for Luxury/‘D’ segment cars resulting in higher conversions.
▪	A dedicated sales force for Luxury/‘D’ segment cars to deliver better customer satisfaction.
▪	A separate showroom team for the high-end luxury model cars.
▪	Creation of separate co-ordination team, distinct from the sales team for handling documentation, registration, finance etc, which results in quicker turnaround of each sale transaction.
▪	Setting team-based targets instead of individual targets for sales people. This appears to foster teamwork and increases overall sales. The system also identifies individual under-performers.
▪	Dealership having a wide geographical selling territory especially in semi-rural/ upcountry areas have appointed external agencies to increase sales. These against source new customers as well as undertake quick repairs and stock parts.
▪	A systematic process to leverage post-sale customer sentiment during and after completion of sale formalities and vehicle delivery (when the “feel good factor” is highest for the customer). This involves the sales manager sharing a cup of beverage with the customer. Moreover, calling up the customer within 2-3 days of the sale to assess customer satisfaction as well as to seek referrals to new prospects.
▪	Developing a specific focus on “tade-in” vehicles. The dealership targets specific customers from its database owning a particular vehicle, for trading it in for a new purchase of a higher-end model. The old vehicle is either refurbished and sold by the dealer or routed to other brokers.
Ideas/Learning on Service Management
▪	Making the Service Advisor (SA) the one-point contact with the customer:
	-	The Service Advisor (SA) is being positioned as a one-point contact between the customer and service department. He is technically competent to do a detailed diagnosis and is trained in customer management. The customer does not interact with the Workshop Controller/Mechanics at all and the SA approves all parts requisitions as well as changes in labour, parts estimates. For the customer, this result in a superior service experience, as he/she interacts with a well-trained service person and experiences a single point communication on any issue. From the dealership standpoint on any issue. From the dealership standpoint, there is greater process ownership from the Service Advisor. Besides, since the Service Advisor interacts extensively with customer, he is also given targets for additional revenue – Teflon Coating, Polishing etc.
▪	Vertical Team structure within the Service Department:
	-	A vertical team structure can be instituted within the service department. Each team comprises a Service Advisor, a Workshop Controller and a set of technicians. Individual targets and incentives are set for each team. This seems to result in higher productivity, quality and ownership of jobs due to healthy rivalry between teams across the service department hierarchies.
▪	Instituting a Service Quality Audit Team:
	-	A separate Service Quality Audit Team has been instituted for each vehicle. The quality personnel are independent of the service team and are responsible for checking the quality of work performed on each vehicle as per the Job Card. The Quality Audit report is used to incentives/penalize the specific team responsible for the job.
▪	Creating a Points-Based Incentivisation Scheme:
	-	Points are assigned to each job in the labour schedule. These are then linked to specific incentives based on the number of points accumulated by each mechanic team. A points accumulated by each mechanic team. A points-based system appears to be more relevant and comprehensible to mechanic teams who find it difficult to calculate their incentive earnings on a total value basis.
▪	Active tracking to ensure higher appointment visits by service customers.
	-	The Service Department ensures a higher conversion of appointment visits through active tracking of service customers. A letter is sent one month prior to the appointment date. Thereafter, there is a tele-calling system which contacts each customer at periodic intervals – 10 days prior to the visit date followed by a confirmation 3 days and again a day before the actual appointment. These measures have resulted in an 80% conversion of targeted service appointments, resulting in a high utilisation and better management of the service center.
▪	Moving to a two-shift operation:
	-	It was observed that a single shift (9.00am – 5:00pm) operation was creating capacity constraints at certain hours in the morning. A customer analysis revealed that a number of customers were amenable to visiting the workshop in the evening too. Hence, a second shift (2:00pm – 9:00pm) was started and a portion of the service staff was re-allocated to this slot. This resulted in better service management and customer satisfaction.
Ideas/Learnings on Parts Management
▪	Close working with accident repairs department for disposal of ‘dead’ parts:
	-	The parts department identifies ‘dead’ parts, which need to be disposed off. The Accident Repairs Department then focuses on persuading the Insurance Surveyor/Customer to replace the relevant part instead of repairing it.
▪	Developing a customised kit for scheduled service job:
	-	Customised kits/packages have been developed for specific paid service/preventive maintenance schedule jobs. These kits are kept ready for use based on the number of vehicles coming in for service. This has resulted in saving time on parts requisition and duicker turnaround of service jobs. The above was a snapshot of ideas generated during the preliminary discussions with dealers. In the next phase of the study, a rigorous benchmaking of data would be done to identify superior performance among the participating dealerships. Based on this, ideas which contribute to superior performance would be identified. These ideas will be further detailed in terms of process mapping and by quantifying the benefits associated with the implementation of these ideas. Avalon Consulting would also be involved in assisting in implementation of ideas of interest to specific dealerships.