A
Perky Scenario
Binod Agarwal, President
Dear friends,
The long festival season is over. I hope, you would have
had an exciting time during Diwali and Eid. Most of us are
now looking forward to the Christmas Day, another big occasion
not only in India but worldwide. While triple bomb blasts
in Delhi spoiled the party, Delhiites rose to the occasion
and gave a snub to those engaged in terrorist activities
by swamping the markets and celebrating Diwali and Eid with
gay abandon. My heartfelt sympathies with those who were
injured and those who lost their near and dears in this
dastardly act.
The festival season has turned out to be a bonanza for the
industry and trade. The performance of consumer durable
industry during October is something to cheer about, as
various reports suggest. It is heartening to note that the
automobile industry came up with stellar sales figures that
were records of sorts. The sales tally is really music to
our ears. The Indian auto industry is poised for a big leap.
It will be no wonder if these records are broken and replaced
by new records very soon. The motorisation and vehicle penetration
levels in India are still very low, which is an encouraging
sign in contrast to the developed countries where automobile
markets have reached saturation points. India can look forward
to an explosive growth during times to come. The reasons
for the rosy outlook are not far to seek. Indian economy
is growing at a decent place. The GDP growth during the
2nd quarter of the current fiscal was over 8%. Consistent
performance of the Indian economy in the last few years
goes to show that we are no more content with the Hindu
rate of growth which came to be associated with the Indian
economy for long. The opening up of economy and consequent
competition has made us mentally strong. We have started
believing in our enterprise and capability and are geared
to take on the competitive challenges.
Rising aspirations of the people and introduction of new
models and variants in the market from time to time are
other two major factors driving the growth. The launch of
a number of new models and variants across various segments
of industry during the festival season definitely provided
an impetus to the buoyant sales. The larger question, which
perhaps begs answer, is whether the robust performance of
the industry is finding its reflection in the bottomlines
of automobile dealerships. I tend to agree that the performance
of the industry cannot be taken as the barometer of the
financial health or profitability of automobile dealerships.
We must appreciate that the sale margins will continue to
be what they are in this competitive scenario. The intense
competition in the market place means that the manufacturers
have their own pricing constraints and are constantly expanding
their spread to make sure that they are not left behind
in a race to explore and tap new markets. This, in other
words, means that the automobile dealerships have to contend
with the thin sale margins and with the markets having parallel
dealerships at one place.
While shrinking sales margins on one hand and increasing
infrastructural and operating expenses, on the other, put
the viability of dealerships under tremendous pressure and
are a cause of concern for retail automobile trade, we,
the automobile dealers, have to keep pace with the changing
realities. The automobile dealers have to make the most
of allied business opportunities waiting to be tapped. As
many industry leaders have said at various forums of FADA
and through the medium of this journal, automobile dealerships
have to create a distinct service brand of their own to
stand up to the competition.
There is a growing realisation among all the automobile
dealers that they cannot operate the way they used to in
the past and are suitably equipping themselves to stand
up to the challenges of paradigm shift in automotive business.
This is a good sign and shows that we have the will and
perseverance to ride through the rough terrains. I am sanguine
that the future is rosy and that we, as entrepreneurs, will
be able to turn things around sooner than later.
Adverting to FADA's activities since my last message, you
will be delighted to know that the programme for the Auto
Summit 2006 - the 4th biennial convention of automobile
dealers, being organised by FADA in association with Society
of Indian Automobile Manufacturers (SIAM) on 13th & 14th
January 2006 at New Delhi, is making a steady progress.
We have been able to enlist the participation of a number
of eminent speakers, including the leaders of industry and
trade, professionals and academia from within India and
abroad as our guest speakers at the Summit. I would urge
you to avail this golden opportunity of enriching your experience
and register for the Auto Summit without further delay.
I look forward to meeting you all at this important event
of FADA.
Another major activity, i.e. the launch of training courses
to train Sales Executives, Service Supervisors and Spare
Parts Supervisors to cater to the manpower requirements
of automobile dealerships is also on track. Hopefully, we
shall be able to start the pilot project covering the cities
of Mumbai and Pune, to begin with, in January 2006.
In the previous issue, I had touched upon yet another FADA's
initiative under which FADA has started a Helpline to help
its members with opinion on various issues relating to taxation,
environment pollution and provisions & procedures for vehicle
registration & taxes. We shall welcome your queries, if
any, in these areas.
I count on your suggestions and comments to make the activities
and services of FADA useful to its members.
With best wishes,
Yours sincerely,
Binod Agarwal |
