Slowdown is There for Real Nikunj Sanghi, President Dear friends, Hope, you all would have had a blast and enjoyed the great festival – Diwali We, in auto retail, were pinning our hopes on the month-long festivities to cheer the auto market. We have had mixed results. While commercial vehicles and two-wheelers continued to do well and were on track, albeit at a somewhat slower pace, passenger vehicle segment could not come out of the depressed sentiment in spite of festive season comprising a number of festivals one after another, starting with Navratras and followed by Durga Puja, Dussehra, Dhanteras, Diwali and Bhai Dooj. What is worrisome is that the pointers are not something to write home about. RBI continues with its tight monetary stance with a view to taming the inflation that is showing no sign of softening. As a result, interest rates continue to soar without a pause. Industrial production is going through an uncertain phase, with its growth numbers in the recent past hovering at a low single digit. The depressing news reports on economic front keep hogging the headlines time and again with alarming regularity. After a spate of such reports, here comes the report that growth of core industries, having 32% weightage in IIP, touched a 30-month low of 2.3% in September 2011. This found loud expression in the industrial output growth rate for September, which grew by just 1.9% - a 20-month low. The same depressing story has been repeating itself in the case of petroleum prices. The petrol prices increased by Rs. 1.82 - 1.91 on November 4 - the second increase in two months and the fourth increase in this financial year, have been mercifully rolled back by the oil companies. However, the uncertainty over petroleum prices persist, as the oil companies will, as it appears from the news reports, be revising the prices every fortnight. The HSBC Market Purchasing Managers' Index (PMI) - an indicator of manufacturing activity rose for the first time in October 2011 during the last six months, offering a breather to an economy besieged by dampening demand and rising costs. However, the relief was shortlived, as worrisome services PMI data released later brought the gloom back. The PMI for services showed that private sector services activity contracted for the second month in a row in October. The reading contracted to a two-and-half-year low of 49.1 points against 49.8 points in the previous month. Food inflation continued to be in double digits for the first three weeks in October, rising to a near nine-month high of 12.21 per cent for the week ended October 22. While the spurt in food inflation could be attributed to a demand surge in the festival season, the comforting news is that the food inflation has, since, started climbing down and is below doubt-digit now. All hopes are now pinned on a bumper kharif output to bring stability in food prices. The worry is that if manufactured products do not witness a sharp fall in the rate of price rise, the headline numbers for October are likely to be high, promoting RBI to press further with the rate increase. We are keeping our fingers crossed and hoping for the best. A further worry is that the slowdown is becoming all-pervasive. Two-wheelers and commercial vehicles, which had been performing reasonably well, giving rise to the hope that the current downbeat sentiment for passenger vehicle market is transitory, have recorded tepid growth in October. While the numbers reported by the manufacturers still look decent on the face of it, the situation at the retail level is not enthusing. We are in for challenging times ahead. Adverting to FADA’s activities, the preparations for automobile dealers' major biennial event-Auto Summit 2012 scheduled for 9th & 10th January 2012 at New Delhi during Auto Expo-are underway at feverish pitch. I am happy to inform that we have received an overwhelming response from all quarters - be it the number of my fellow dealers seeking registration for participation at the Summit, speakers to whom the invitation has been sent or the support from industry and allied businesses. My fellow dealers will be delighted to know that Dr Montek Singh Ahluwalia, Dy Chairman, Planning Commission of India - an eminent economist in his own right, has kindly consented to inaugurate the Summit and to deliver his inaugural address. As already informed, we already have confirmations from Mr Anand Mahindra, Vice Chairman & MD, M&M; Mr S Sandilya, President, SIAM and Group Chairman, Eicher Motors; Mr R Seshasayee, Past President, CM and Executive Vice Chairman, Ashok Leyland; Mr Stephen Wade, Chairman, NADA and a number of other industry leaders. Health permitting, Mr Keshub Mahindra, Chairman, M&M Group is also expected to grace the occasion. Confirmations from other speakers representing industry, auto retail & allied businesses, management & motivational gurus, from within India & abroad and Government authorities are pouring in. Rest assured, we are going to have a great event mounted at an unprecedented scale. Auto Summit 2012 is really an event, especially for automobile dealer fraternity, not to be missed. I, therefore, again appeal to my fellow dealers not to miss this opportunity and to register in large numbers. The programme details and registration form are published elsewhere in this issue for reference and use by the intending participants. We have kept the registration fee bare minimum, thanks to the support received by way of sponsorship. The idea is to allow large number of automobile dealers to participate and enrich their experiences from the deliberations and interactions spanning over two days. As earlier intimated, the awards presentation ceremony for the 3rd edition of Automotive Dealership Excellence Awards (ADEA 2011) has also been dovetailed with the Auto Summit 2012. Hope, members of retail automobile trade have sent in their nominations for consideration and selection for various categories of awards at stake. ADEA is a joint initiative of FADA and Auto Monitor started in 2009, which is being carried forward in the 3rd year. The objective of institution of these awards is to bring to fore the best practices in automobile dealerships and to highlight the social & community work being carried out by the members of automobile dealer community for the benefit of society at large. Simultaneously, we are working on various other initiatives for the benefit of automobile dealers and sustained growth of auto retail. Of a number of new programmes on the anvil, FADA has embarked on a new transformation initiative in association with Transforma Management Partners Pvt Ltd, which will be a 7-program series on 'Improving the Business Effectiveness' of automobile dealerships. We are happy to inform that the first 3-day residential programme will be conducted by Transforma Management Partners on 2nd to 4th December 2011 at Pune. The target audience for the programme is dealer principals, their spouses, sons & daughters actively engaged in the dealership. I am delighted at the massive response to the programme. While registrations and enquiries for the programme are still being received thick and fast, we had to close the registration due to the limited number of seats. Hope, my fellow dealers, who are not able to participate in this programme, will be able to make it when the programme is organised next time. I would like to reassure my fellow dealers that we are trying our best to live up to the confidence reposed by you and working at frantic pace for the betterment of auto retail business. I shall welcome and be happy to receive further suggestions on improving & strengthening the activities of FADA in the interest of sustained growth of retail automobile trade in India. With best wishes, Yours sincerely, Niikunj Sanghi