Welcome to Auto Summit 2010 S P Shah, President Dear friends, When this issue of FADA Journal reaches you, the D-day for which we have been working and waiting for months now, will have drawn closer. The curtain on FADA's mega biennial Convention, viz. 6th Auto Summit 2010 lifts on 8th January 2010 at Hotel The Lalit, New Delhi. The Summit is being held in the midst of a buoyant auto scenario that has come about after a subdued spell of 13 months following the financial meltdown last year that sent markets across the world into a spin. The report that Indian economy grew by 7.9% in the 2nd quarter of the current fiscal is refreshing to say the least. This, to a large extent, should make some of the experts and multilateral agencies that were less optimistic about the Indian GDP growth during the current year, revise their estimates and opinion. However, we cannot go overboard and say that the slowdown is now history. While I have been enthusiastic on India's growth all through these troubled times, there is a need to exercise caution in writing off growth hurdles. Growth could slow down in the next two quarters, as the effect of a poor monsoon is likely to show up with a vengeance in the H2 and the Sixth Pay Commission largesse for civil servants that kicked in from Q3 of the previous year ebbs off. We should not miss the point that the growth has, by and large, been driven by the stimulus packages and public spending. It cannot be denied that positive sentiment in economy is expected to translate into more footfalls in the showrooms. However, the good GDP numbers for Q2 may tempt the Government and the central bank to take their foot off the accelerator, leaving the economy to cruise along on its own, especially when the public finances are not in a good shape and inflation is ruling high at double digit. Since there is a lurking uncertainty and the business confidence is yet to reach the upbeat mood prevailing during the pre-meltdown period, we would urge the Government that fiscal and monetary policy should stay focused on keeping the trend going. The theme of 6th Auto Summit is: "Auto Retail - Restructure for Sustained Growth". To my mind, we could not have had a better theme. Severe recession gripped the global markets post-Lehman. India and China were fortunate to survive the recession and scraped through more or less unscathed. However, the economic meltdown and consequent slowdown in demand has thrown up many questions on the preparedness of industry and trade for cyclic downturns that may appear on the horizon time and again. There is no gainsaying that in spite of recessionary conditions, there were many who not only stood up to the challenge but also came out winners in adversity. Auto retail needs to learn a lot from such success stories. One of the important lessons coming out of the recent downturn is that we cannot afford to be complacent in this highly competitive and volatile market place. In this fierce competitive environment, one has always to be on guard. We need to anticipate and keep pace with the changes that are taking place at an alarmingly fast pace. Old management techniques and tools are losing their relevance by the day in the fast changing scenario. It is, therefore, important that we equip ourselves to stand up to the current and emerging challenges. To ensure sustained growth, my fellow dealers need to change and restructure in tune with the changing requirements. I am happy that the programme of Auto Summit 2010 has shaped up very well. We are overwhelmed by the participation and support received from various quarters. We have an impressive array of industry leaders and eminent speakers who will be addressing and interacting with the participants at the Summit spanning over two days. I am grateful to the Hon'ble Union Minister of Road Transport & Highways - Mr Kamal Nath, who has kindly agreed to give us the benefit of his address. I, on behalf of FADA, would also like to convey my sincere thanks and gratitude to the industry leaders and other distinguished guest speakers representing auto retail, allied businesses, renowned consultancy firms and academia, who have agreed to participate at the Summit. My grateful thanks to NADA, Russian Association of Automobile Dealers and Brazilian auto dealers, who will be represented at the highest level at the Summit. We, the automobile dealers, are confronted with a host of issues relating to vehicle registration and taxes on motor vehicles day in and day out. As responsible corporate citizens, we are also equally concerned over the rising pollution levels and road accidents. As is well known, India has the dubious distinction of highest fatalities on the roads. According to the reports, approximately 110,000 people die and about 500,00 people are disabled in road accidents every year. The convention will provide us with an opportunity to bring forth and highlight these issues before the Hon'ble Union Minister. Similarly, auto retail as a business is losing its sheen with ever increasing operational costs due to competition, growing complexities, expanding product portfolio & inventory and rising expectations of the manufacturers, on one hand, and the customers, on the other. Automobile dealers, although an important link in the value chain, find themselves in an unenviable position in that while the dealership management costs have skyrocketed, the sales margins have remained stagnant over the years. As far as the customer is concerned, the dealer is the face of manufacturer and, therefore, responsible for the quality of product and after-sales services. It is the dealer who has to bear the brunt of customer dissatisfaction with the product and service. Dealerships, therefore, need to be professionally managed, well equipped and well staffed. In this buyer's market, running and operating a dealership is not a cakewalk, as it used to be, say, before 1995. Automobile dealership requires huge investment, managerial skills and enterprise. With the presence of a galaxy of industry leaders representing various segments and captains of allied businesses, I am sure, the deliberations of Summit will throw up answers to some of these issues and identify new opportunities for auto retail. Needless to mention, while sales profits have been shrinking over the years, there are new opportunities emerging and waiting to be tapped. The focus of this Summit is nitty-gritty of dealership management and bread & butter issues dear to the heart of automobile dealers. As a part of the programme of Summit, six separate group discussions have been scheduled on various aspects of dealership management, including increasing revenues from workshop and allied business activities, increasing productivity and efficiency through better reporting systems, using internet as a marketing tool, used vehicle business and manpower planning. Therefore, the Summit is an occasion not to be missed by fellow dealers. Last but not the least, I am equally overwhelmed by the support we have received from industry and allied businesses by way of sponsorship of the Summit. Thanks to the support of sponsors, we were able to organise the previous summits at a grand scale in the past. The 6th Summit is going to be an equally good or a better show. That we have been able to get an overwhelming support this time too, is the reflection of the importance of auto retail and FADA's approach to work in partnership with all players in the value chain. I look forward to the presence and participation of my fellow dealers and all those connected with auto business in large numbers at the Summit. With best wishes and Season's Greetings, Yours sincerely, S P Shah