Dealers in India Offset Slowdown with More Diverse Revenue Sales Sources

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Mohit Arora

Dealers in India expect to generate more than one-third (34%) of their revenue this year from sales of parts and accessories, auto insurance, and commissions on loans, which is an increase from 22% in 2011, based on analysis from our 2012 India Dealer Satisfaction with Automotive Manufacturers Index Study. Finding new revenue opportunities is a way to manage risks of a slowdown in the auto market since the growth rate of passenger-car sales in India this year has been the weakest since the 2008-09 fiscal year, when sales were hurt by the global financial crisis. On a more positive note, this year’s study finds that overall dealer satisfaction with automakers has increased 71 points to 820 (on a 1,000-point scale) from 749 points in 2011. According to the study, satisfaction improves across all nine measures,* with the largest improvement in support from the manufacturer—the factor with the most weight in our index.

A few findings from our study, which is based on responses from 583 dealer principals or general managers at dealerships in some 208 cities in India are highlighted:

India Toyota Showroom
  • Dealers who indicate that their vehicle ordering experience was “better than expected” are more satisfied with their OEMs than are dealers who report less satisfying experiences in ordering vehicles.
  • More than half of the dealers surveyed indicate that their OEMs are invoicing vehicles on the same day as the order is placed, which is up from one-third a year ago.
  • A majority (80%) of dealers say they are able to follow the real-time delivery status of vehicles, which helps dealers track delays and delivery changes.
  • Among manufacturers included in the study, Toyota, for the second straight year, receives the highest satisfaction index score of 913 (on a 1,000-point scale).
  • Following Toyota in the dealer satisfaction rankings are, respectively: Hyundai; Maruti Suzuki; Chevrolet; and Ford. All five automakers receive scores that are above industry average.

It’s evident that satisfaction with the working relationship between dealers and automakers is higher among those dealers who expect a greater proportion of their income to come from more diversified sources. Dealers do rely on their automakers’ support in generating additional revenue through diversified sources in order to maintain their viability. Also, automaker support further strengthens the dealer-manufacturer working relationship and having a more informed and satisfied dealer network in turn helps manufacturers to enhance customer relations and boost sales.—Mohit Arora, executive director at J.D. Power Asia Pacific, Singapore.

*The J.D. Power Asia Pacific 2012 India Dealer Satisfaction with Automotive Manufacturers Index StudySM measures nine factors that include: marketing and sales activities; product; vehicle ordering and delivery; sales team; parts; warranty claims; after-sales team; training; and support from the manufacturer. Besides examining dealer satisfaction with vehicle manufacturers or importers, the study also looks at dealer attitudes about the automotive sales business.