A Fulfilling Year Nikunj Sanghi, President Dear friends, I have completed over one year in the office of President of this august body. It is time to take a stock of what we have been able to do and what more needs to be done. While you are the best judge whether we have been able to live up to your expectations, I feel that it was a fulfilling year inasmuch as we were able to sustain the tempo of activities and worked in right earnest to address some of the issues bugging automobile dealer fraternity, with positive outcome to a large extent. The new Council started off when the automotive scenario was buoyant and the mood upbeat. The auto market was growing at a fast clip never heard of before and virtually all forecasters were gung ho about the Indian growth story. There goes a saying that 'Well begun is half done'. However, things have not gone the way we, in auto retail, had expected when the new Council assumed office in July end last year. Upbeat sentiment prevailing in the auto market then has changed over to somewhat reflective mood. We have been seeing the heady growth rates of last year taper off with alarming regularity since March 2011, when the slowdown set in. Developments over the last one year have not been conducive to growth either. Persistent high inflation, soaring commodity prices including that of petroleum products and hardening interest rates have, largely, played spoilsport. What is more worrying is that these headwinds that have dragged down the growth are showing no signs of relenting. The prevailing economic environment, such as slow and unsteady pace of recovery in developed economies, natural calamity in Japan from which the country is yet to recover fully, turmoil in USA and Europe over sovereign debt and none-too-enthusing industrial production numbers of domestic industry as well as lacklustre investment growth do not provide solace or comfort. The apex bank's all-out monetary war against inflation is beginning to extract a heavy cost, with factories cutting production, car sales declining and GDP growth estimates falling close to the levels witnessed during the global financial crisis two years ago. Indian factory output expansion slipped to its lowest in 20 months, as measured by the HSBC Purchansing Managers Index (PMI). The seasonally adjusted index fell for the third month running in July 2011 to 53.6 down from 55.3 in June. All said and done, auto market at the moment may be down somewhat but is not out. All segments of market, barring passenger cars, are still growing albeit at a slower pace. While various agencies and think-tanks have revised downwards the growth estimates of Indian economy for the current year, expected GDP growth of 7.5%+ on an average, according to the revised estimates, though far short of 9% initially targeted by the Government, still makes a decent reading. Turbulent international scenario notwithstanding, Indian domestic market continues to witness robust demand even though the mood is a little subdued. Bucking wobbly global economic scenario, India's exports have shown remarkable resilience growing at a brisk pace. It is a moot point, though, whether exports will be able to sustain the scorching pace of growth in view of the recent downgrading of the US credit rating by Standard and Poor's and disquieting notes emerging from Europe on debt servicing. Core sector, which is a barometer of industrial activity, is growing at about 6%. Services and agriculture sectors that contributed handsomely to the GDP growth last year are doing reasonably well. The monsoon and its coverage has been fairly good so far giving rise to the hope that good agriculture growth will tame the food prices in large measure and lift the mood for the market to cash in on in the second half of the current fiscal. Quite a few new offerings, especially in passenger cars, in pipeline and slated to be rolled out soon are likely to add zing to the market and fervour to the festive season ahead. I am, therefore, optimistic that auto market will be able to scrape through this soft patch to finish the year with a fairly good growth. However, we have to tread cautiously and be prepared for facing an unpleasant development and eventuality. While the developments within and outside the country may have robbed the Indian auto market of its sheen a little, we in FADA Council never allowed our shoulders to droop. I take this opportunity to assure my fellow dealers that we put in our sincere and earnest efforts to remove roadblocks in the way of sustained growth of auto market in India. The issues affecting my fellow dealers, be it at the local, regional or national level, were promptly taken up and sincere attempts made to resolve them. While a detailed annual report of FADA's activities is published elsewhere in this issue, I recapitulate a few major initiatives taken during the year in the succeeding paras. Of the major initiatives undertaken during the year, FADA appointed a Service Tax Consultant to help automobile dealers deal with the complexities of service tax law so that they are well informed and do not get dragged into litigation unwittingly. This service has been very well received. FADA has received a large number of queries that have been clarified by the Service Tax Consultant. With a view to addressing and resolving the acute problem of widespread shortage of skilled manpower for auto sector in long-term perspective, SIAM, ACMA and FADA joined hands to form the Automotive Skills Development Council (ASDC) under the aegis of National Skill Development Corporation. While the formation of ASDC may not yield the immediate dividends, it is expected to spearhead a movement for an all-round excellence in training and skill development matching the needs of auto sector as a whole. We sustained the tempo in our international relations, and the efforts are afoot in right earnest to form an organisation of auto retail bodies in various countries at the global level. Following the grand success of a regional convention in November 2010 at Jaipur, we are set to organise FADA's 7th convention of automobile dealers, i.e., Auto Summit 2012 on 9th & 10th January 2012, coinciding with Auto Expo in New Delhi. The legacy of recognising and rewarding automobile dealers who have set benchmarks in various areas of dealership management and undertaken initiatives in the areas of CSR and community service is being carried forward. The process for the 3rd edition of Automotive Dealership Excellence Awards (ADEA2011) has already been set in motion, which will culminate in a grand awards presentation ceremony during FADA's 7th Auto Summit. This is only an illustrative list and not exhaustive. We are not resting on our laurels and are working on a host of new initiatives for the benefit and in the interest of automobile dealer fraternity at large. All this could not have been possible but for the support and guidance of our past presidents and my colleagues in the Council. My profound thanks are due to our Past Presidents, especially Mr Vinay Nevatia, Mr Bharat Sanghvi, Mr Rakesh Jain, Mr Ajit Chordia, Mr Binod Agarwal, Mr Deshnidhi Kasliwal and Mr Kailash Gupta for their wise counsel, support and guidance from time to time. My special thanks to our Vice President - Mr Mohan Himatsingka, Hony Secretary - Mr K V S Prakash Rao, and Mr Mukesh Jain, Hony Treasurer, who stood by me through thick and thin and extended their unstinted support to carry forward our agenda of promoting sustained growth of auto retail. My sincere thanks are also due to Mr S P Shah, Director General, FADA, who is earnestly working on formation of auto retail organisation at the international level, conducting programmes for the younger generation of automobile dealers, and carrying forward the SAFE-SIAM-FADA initiative on Vehicle Safety Inspection Programme. I am also thankful to my fellow dealers across the country for continuing to repose their trust and faith in me and coming up with all-out help whenever needed. I shall be failing in my duty if I do not acknowledge the support extended by the Government, industry and various NGOs, who responded positively to our concerns. I am thankful to industry chambers, namely, SIAM, ACMA, FICCI, CM and ASSOCHAM for their support and guidance. I express my sincere gratitude to Dr Pawan Goenka, President, SIAM and other industry leaders as well as officials of SIAM for pitching in with their support whenever required. Although I recall the last one-year with a sense of fulfilment, I do realise that a lot more needs to be done. I am sure, your continued involvement and support will be forthcoming to steer the organisation and retail automobile trade to the next level. With best wishes, Yours sincerely, Nikunj Sanghi