Home On a Steady Growth Track Binod Agarwal, President Dear friends, I would be completing one year in the office of President of this august body. It is a high time that we review the progress in the last one year. At the outset, it gives me a sense of satisfaction that Indian automotive industry has got off to a solid start and set out on a growth path from the word go in the current financial year, continuing the growth saga of the last 3 years or so. This is in sharp contrast to the quiet beginning in the previous year due largely to confusion arising out of the introduction of stringent emission norms from 1st April 2005. The continuing strong performance of Indian economy with inflation by and large under leash suggests that the Indian automotive industry is going to end up with a reasonably good performance in the current fiscal. However, we cannot afford to be complacent simply because the uncertainty over international petroleum prices continues to loom large over the horizon. I remain optimistic, nevertheless, and believe that we are headed for decent growth in the fourth year running. On organisational front, while a detailed annual report is published elsewhere in this issue for the information of members, I would like to dwell upon few major activities undertaken by FADA during the year. FADA has made a steady headway on most of the activities initiated for the benefit of its members in the previous year(s) and the current year. Helpline Service launched in the beginning of the year 2006 has evoked a lot of interest of members as seen from the number of queries received by the undersigned, FADA Secretariat, Director - Helpline and the State Chairmen on issues relating mainly to tax matters and, in particular, service tax, sales tax on warranty parts and VAT. We have made an honest attempt to clarify all those queries and hope that FADA members would have benefited from the service. Another service launched during the year for the benefit of FADA members, namely, circulation of information on availability of excess, obsolete inventory of spare parts lying with FADA members among the dealers of the same franchise, has also attracted a number of sales offers from the members wanting to dispose of such inventory. I understand that while the information in this regard has been widely circulated to dealers of the same franchise, there has not been much of the response to such offers. However, we shall continue this service to enable automobile dealers realise their locked capital and use it for productive purposes. FADA's biggest biennial event, Auto Summit 2006 on the theme: "Changing Face of Auto Retailing: A Global Perspective", was organised in association with Society of Indian Automobile Manufacturers on 13th & 14th January 2006. The Summit was inaugurated by Mr Praful Patel, Union Minister of Civil Aviation. The Summit attracting over 750 participants from India and abroad was a stupendous success and served its purpose of bringing various players in automotive business chain, including industry leaders, at a common platform for deliberations on wide-ranging issues. As members may be aware, on the initiative of FADA, an Auto Retail Task Force, chaired by Mr Vinay Nevatia, Past President, FADA was formed within FICCI about 1 1/2 years back. After a series of meetings, the Task Force identified and put together issues for being taken up with the concerned Government authorities. An interactive session with Mr L Mansingh, Secretary, Ministry of Consumer Affairs, Government of India was held recently. The interaction went a long way in making a statement on the important role being played by retail automobile trade in terms of its contribution to GDP, Central & State exchequers and employment generation in the country. I am happy to inform that Mr Mansingh agreed to take up the issues of concern to retail automobile trade with the concerned Ministries of the Central Government. Building on the interaction with the Secretary, Ministry of Consumer Affairs, a Seminar is being organised jointly by FICCI and FADA some time in the middle of September 2006 at New Delhi, wherein Transport Commissioners and Transport Secretaries of some of the States and other concerned authorities in the Central & State Governments, as well as industry representatives, senior officials of banks, finance and insurance companies are proposed to be invited as guest speakers and panelists for interaction and discussion on host of issues including taxes & registration procedures relating to motor vehicles, road infrastructure, vehicular pollution, road safety & traffic management, and land use & urban planning. Wishing the conference all the best, I express my sincere thanks to Mr Vinay Nevatia and Mr Rakesh Jain, both Past Presidents FADA, in taking the lead for this initiative. I regret to note that the FADA Academy's Pilot Project launching training courses at Pune and Mumbai to begin with, for training Sales Executives, Service Supervisors and Spare Parts Supervisor for placement in automobile dealerships that are facing manpower shortage, has not received the expected response. With automobile industry poised for a phenomenal growth, the manpower availability is going to get acute in the coming days. Automobile dealer fraternity, therefore, must come forward and support this initiative of FADA in its own interest. With increasing globalisation and frontiers becoming irrelevant in the fast changing economic scenario, networking with similar bodies abroad is imperative in order to remain in loop and abreast of the developments elsewhere in the global arena. In keeping with this objective, a 7-member delegation of FADA visited the Headquarters of National Automobile Dealers Association (NADA) based in Virginia, USA recently. The delegation also took this opportunity to visit two automobile dealerships there to get an insight into the automotive scenario in the largest producer of vehicles and automobile market in the world. Key findings of this study tour are published elsewhere in this issue. We, the automobile dealers in India, need to learn a lot from our fraternity in US. There is no gainsaying that the US automobile dealers are much more organised. As a result, they enjoy a more legislative protection and wield a significant clout over legislators and decision makers than automobile dealers in India. Strength of NADA can be gauged from the fact that over 20,000 automobile dealers representing 93% of the retail automobile trade are members of this organisation. My appeal to automobile dealers here is to organise yourself and strengthen FADA further as the Voice of Dealers. That is the only way we can secure the recognition we deserve as an important segment in the automotive industry and the national economy. I would like to assure that we, in FADA Council, have earnestly tried to give shape to and strengthen the activities aimed at benefiting the automobile dealer fraternity and have been successful in our efforts to a large extent, thanks to the support & guidance of our Past Presidents and members at large. It was a great experience for me in particular inasmuch as I was able to meet and interact with my fellow dealers spread across the country and to do my bit, with the able support of my colleagues in the Council, State Chairmen and local members, in addressing some of the problems confronting them. I owe my thanks to my fellow members in Council, our Vice President - Mr Pradip R Kamdar, our Past Presidents and members all over the country for lending their cooperation, support and wise counsel in discharge of my duties. I am also grateful to various Government authorities at the Central & State levels, automobile manufacturers, CEOs and senior officials of the banks, finance & insurance companies and auto component & equipment manufacturers, as also the NGOs and institutions. They have been quite positive and responsive to various initiatives, activities and concerns of FADA. My thanks are also due to industry & trade associations at the national & State levels, especially SIAM, FICCI, CII, ASSOCHAM and Federation of Karnataka Chambers of Commerce and Industry for their unstinted support. I shall be failing in my duty if I do not acknowledge the able support extended by FADA Secretariat in spite of its resource constraints. My best wishes to all of you and the incoming President. Yours sincerely, Binod Agarwal