Getting Down to Serious Business Pradip R Kamdar, President Now the euphoria and buzz of Auto Summit 2008 is over, we need to get down to some serious thinking. The Summit has left us with a number of innovative ideas to mull for action. While FADA as an organisation representing automobile dealers has a task on hand to identify points arising out of the two-day proceedings and initiate action thereon from short-term, medium-term and long-term perspectives, I feel that it is essentially the automobile dealers, who have to put their act together individually and get cracking at some of the useful thoughts and suggestions emerging from the discussion. It goes without saying that the customer has to be the focus of our business in this era of fierce competition. The customer loyalty is a passé and we have to adopt innovative ways to reach out to and retain our customers. My fellow dealers need to look at the suggestion made by Mr Seshasayee, with all seriousness, for making extensive use of IT to identify the customer needs, which keep changing from time to time. As aptly suggested by Dr Pawan Goenka, automobile dealers have move to the next level - from customer satisfaction to customer engagement, so that he or she becomes our co-promoter. This can be possible if we have Value Added Products & Services, e.g. Pre-Owned Vehicles, After-Sales Service, Accessories, Insurance, Finance and Sales on offer, encompassing the entire gamut of pre-sale, sale and post-sale needs of customers. Pre-Owned Vehicle Business is going to become the key to profitability of automobile dealerships as the experience of developed countries like the USA shows, which was cogently brought out by our esteemed speakers in their presentations at the Summit by way of facts and figures. This area of business activity is not only a handsome profit centre in itself, but is also a driver of new vehicle sales. While these ideas sound wonderful, it is eventually the employees who make it happen. Taking forward the mission and the strategies of any business is dependent upon the commitment, integrity and skills of management and its employees. The shortage of skilled manpower has become a constant niggle or rather, a headache for virtually all automobile dealerships across the country over the years. "Employee engagement is a pre-requisite to the customer engagement' and, therefore, a mantra for success, as driven home by Dr Goenka in his presentation. Only a satisfied employee can deliver customer delight. It ultimately boils down to the integrity and skills of employees who make or break any business. We, in FADA, have been trying to do our bit in addressing the problem of dearth of trained manpower by rolling out training courses in association with reputed management & technical institutes in different parts of the country. Ironically, while I find that the automobile dealers have been raising this concern at various forums, what we have experienced so far is that my fellow dealers have not come forward wholeheartedly to support this programme. Similarly, the response from candidates solicited to join the training courses at various places has also been equally lukewarm. This is a double whammy. On one hand, the automobile dealers have been indifferent when it comes to supporting the training programme started by FADA, on the other, the candidates do not find the career in automobile dealerships exciting. In other words, the apathy of automobile dealerships in investing in training and skill development of their employees apart, there are not many takers of jobs in automobile dealerships. This leads to a larger question that while the enormity of problem is a cause of concern, the issue of people not wanting to choose career in dealerships requires soul-searching on the part of automobile dealer fraternity. With economy growing at around 9% and retail, insurance, banking and finance sectors, which are perceived to offer better growth prospects, growing at still higher rate, I am concerned that the manpower problem is going to get acute and assume serious proportion for automobile dealerships in the future. The automobile dealerships are in a cleft stick in that their costs under various heads, including the capital costs and salary bills are going through the roof unabated and their margins are getting squeezed with each passing day due to the intense competition in the market place, thereby putting a tremendous pressure on their viability and ability to attract and retain the skilled employees. However, in spite of constraints and ever-increasing cost of operations, automobile dealerships are increasingly taking to the professional management, offering growth opportunities and fulfilling experience for their employees. We need to correct the public perception. Simultaneously, we have to put our house in order with well-defined, structured HR policies, compensation package and growth path for our employees. Secondly, automobile dealers need to come to terms with the reality that with the growth of organised retail, insurance, finance and banking sectors - all vying with auto retail in attracting and wooing skilled manpower - over the years, the employment in auto retail sector is no longer considered lucrative and fulfilling. The auto dealerships, as such, may not be able to attract the skilled persons, who are ready to assume the responsibility from day one. Therefore, automobile dealers have to give a serious thought to the suggestion for hiring candidates with attitude and training them to develop skills. The training of employees has to be undertaken in all earnestness, as an ongoing activity, in order that they keep pace with the changing customer needs and expectations. The Summit has provided a lot of food for thought. Hope, these suggestions will be given a serious consideration by my fellow dealers. Adverting to the auto market, there are mixed signals, when it comes to the performance of economy and automobile industry in the current fiscal. As reflected in its 3rd quarter review, RBI is treading a cautious path and has left the bank rate and CRR unchanged for fear of fuelling inflation currently hovering around 4%. The central bank has pegged its GDP growth projection at 8.5% for the FY 2007-08, with a rider that there is no further escalation in international crude prices and barring domestic and external shocks. However, buoyed by the revision in growth estimates to 9.6% for the year 2006-07, our FM remains upbeat that the economy will be able to clock 9% growth despite turbulence and heightened global uncertainties. Similarly, the performance of auto market is also a mixed feeling for the industry and trade. While the passenger cars are clocking reasonably decent growth numbers and commercial vehicles are gradually picking up steam after a sluggish start, the two-wheeler market has not been able to come out of the negative terrain. RBI has not revised the bank rate. It has, nevertheless, assured that there is enough liquidity within the banking system, which should soften the interest rates in due course of time. If that happens, we can hope that the two-wheelers will be back on the growth path soon. Industrial slowdown is there for everyone to see, as brought home by RBI and CSO. Unless the industrial activity gathers momentum, CV segment is expected to end up with a flat or modest growth. We are pinning our hope on the early softening of interest rates and pick-up in industrial activity. Please feel free to send your suggestions and inputs, if any. With best wishes, Yours sincerely, Pradip R Kamdar