Regional Meeting at Chennai

FADA in association with Motor Vehicle & Allied Industries Associations, Chennai organised an Open House Session in Chennai on 25th August 2006. Sharath Vijayaraghavan, Chairman, Motor Vehicle & Allied Industries Associations (MV&AIA) welcomed the guests and the participants. The guest speakers on the occasion were: Dependranath Sarangi, Special Commissioner & Secretary (Transport), Government of Tamil Nadu; Arvind Mathew, President & Managing Director, Ford India; and Antony Jacob, Managing Director, Royal Sundaram Alliance Insurance Company.

The occasion was marked by the unveiling of the portrait of T S Santhanam, founder President of FADA by Binod Agarwal, current President, FADA. Born in 1912, T S Santhanam played a stellar role in pioneering and promoting the cause of retail automobile trade. Starting with a transport business, he ventured into auto component, auto retail, insurance, finance and allied businesses and achieved a tremendous success. He was associated with a number of Government committees and organisations in various capacities. Corporate social responsibility and philanthropy were at the core of his heart till he breathed his last on 15th April 2005.

Binod Agarwal, President FADA giving a brief introduction of FADA, touched upon the major activities initiated by FADA of late, namely, Helpline Service, G-10 programme, FADA Academy, etc.

Automotive scenario was enthusing for auto sales were on positive growth curve for the 4th year running. However, whether the healthy growth figures translated into the increased profitability of auto dealerships was a moot point, he added.

Arvind Mathew speaking on the occasion, touched on the rapidly changing dynamics of automotive business in India, where total customer satisfaction was the only way to go. What were considered 'value added services' a few years ago, are fast becoming hygiene factors. Hassle-free loans and cashless transactions for insurance-based repairs are just some of the demands that today's savvy customers, with their growing exposure, expect as the norm.

Painting a bright scenario of the Indian automobile industry in the years ahead, Mathew said that young India where 70% of the people are under 40 years of age and more focused on consumption than savings for improving their lifestyles, would be the key driver of growth.

He sounded a word of caution for automobile dealers saying that independent modern garages were likely to come up in near future. The dealer workshops, which brought in significant revenues for the dealerships would have to face competitive threat from these garages. He cited the example of Reliance Petroleum that had decided to upgrade its dispensing stations to set up 200 modern garages. He, therefore, advised automobile dealers to gear to meet this emerging challenge by coming up with innovative strategies and ideas for owning and retaining their customers, such as - Extended Warranty, Loyalty Program, Total Maintenance Program, etc. He also exhorted dealers to promote the use of genuine parts as an integral part of their sales and after-sales transactions, as spurious parts eroded the brand image and customer confidence.

Manpower availability was another major challenge, said Mathew, adding that automobile dealers must allow their employees the space to grow and move up the value chain.

Antony Jacob scanning the emerging insurance scenario stated the detariffing of insurance sector scheduled to come into effect from January 2007 would bring in host of challenges and opportunities for automobile dealers. The new insurance regime would have two distinct features. One, in the tariff free market, amount of premium would shift from tariff-based to risk-based pricing and would, accordingly, be based on geographical location, features & age of the vehicle and also the person driving it. Therefore, it would be necessary for automobile dealers to equip themselves for minute customer details. Second distinct feature of detariffing would be 'Product Differentiation'. Insurer will be able to provide products packaged to meet customer's requirements in the second phase of detariffing slated to kick off in 2008.

Dependranath Sarangi in his presentation said that the mission of Tamilnadu Government was to provide safe & efficient public transport to the people of the State, by adopting the following strategy:

▪	Proactive Public Policy
▪	Intelligent Public Transport System, particularly the Bus Management System
▪	Route Rationalisation
▪	Fleet Management
▪	Inventory Management

 
Sarangi pointed out that the TN State Transport Corporations would emulate the example set by the Transport Corporations of Andhra Pradesh and Karnataka, where the 'hiring-contract' had worked profitably. He added that private-public sectors partnership would form a vital part of the state transport corporations in the coming years.