FADA convention sees dealer fraternity debate ways to ride disruptive future  and emerge triumphant

by Autocar Pro News Desk , 08 Feb 2020

The Federation of Automobile Dealers Association (FADA) concluded its 11th Edition of Auto Summit 2020, yesterday in New Delhi. The theme of this year's edition was an apt topic that has much relevance in the present context, ‘Thriving Amidst Disruption’.

The chief guest for the annual convention was Nitin Gadkari, Union Minister, Ministry of Road Transport and Highways & Shipping, Micro, Small and Medium Enterprises, Government of India, who inaugurated the event. 

Also present were Ashish Harshraj Kale, President, FADA; Vinkesh Gulati, Vice- President, FADA; Manish Raj Singhania, Secretary, FADA; Nikunj Sanghi, Past President, FADA; and C S Vigneshwar, Treasurer, FADA along with distinguished luminaries, senior officials from OEMs, senior government dignitaries from different ministries, industry think-tanks and over 700 dealer-members of FADA.

Addressing the annual convention,  Nitin Gadkari, said “I would like to take this opportunity to thank every member of the mobility eco-system, especially the dealer fraternity for offering employment opportunities in the interior parts of the country, without the hassle of relocation of the individual.”

Gadkari said that he expects the dealer fraternity to support the government in establishing 1,000 private training, pollution and fitness check centres. Dealers from the interior backward, tribal and rural parts of the country will play a significant role in generating employment opportunities as the country has a scarcity of over 22 lakh trained drivers. He also called upon the dealer fraternity to utilise the water transport mediums, considering its cost effectiveness, to reduce logistical costs and thus reduce overall costs for the dealers, which can be passed on to the consumers.

Ashish Harshraj Kale, President, FADA said, “I would like to thank the minister and the distinguished guests of the auto fraternity for coming together at this annual convention, deliberating the future discourse in a volatile and disruptive environment. We, as an association, are thankful to the entire automotive fraternity for congregating under one roof and making this convention successful.” 

The Auto Summit had a number of sessions on electric mobility, CMVR and Vahan 4.0, passenger vehicles, commercial vehicles and two-wheelers with more than 50 speakers deliberating on the future and challenges that dealerships face, BS-VI and beyond.  There were also keynote addresses by Rajeev Chaba, President and MD, MG Motor India and Hardeep Singh Brar, Director - Marketing & Sales, Great Wall Motor.

Industry platform
The Auto Summit provides a common platform for industry, automobile dealers, management consultants, academia and think-tanks to deliberate on the changing dynamics of the auto retail and service industry and identify the challenges and opportunities.

One of the first panel discussions was between representatives of the passenger vehicle industry on the theme of 'Future of Dealerships' comprising Kia Motors India' Manohar Bhat, Toyota Financial Services' N Raja; Honda Cars India's Rajesh Goel; Ravi Narayanan; Mercedes-Benz India's Santosh Iyer; Maruti Suzuki India's Shashank Srivastava, Mahindra & Mahindra's Veejay Nakra, and FADA's Vinkesh Gulati.

Veejay Nakra, Chief of Sales & Marketing, Mahindra & Mahindra Auto Division, said, "The next two years will redefine the price-value equation in the Indian automotive industry with new entrants coming in and existing manufacturers adding to it. Today, capital allocation needs to go into hyper local digital marketing for the dealers, getting in the right talent of people, building their capabilities to help sell and service better. The consumer is going to have all the possible choices, fantastic designs, superb technology and a wow price. Vehicle manufacturers and dealers collectively have to work together to manage this new normal."

According to Santosh Iyer, Vice-President - Sales & Marketing, Mercedes-BenzI India, cost is important but so is growth and bagging substantial profits. Passenger vehicles could be the way to them. The customer has the right to negotiate, which is why discounts and offers play a huge role. Consumers must not be allowed to benefit from the competition amongst the dealers."

A special session was organised on the 'Seven Habits of Highly Effective People”, a short motivational session by Sadhu Gyanvatsaldas, who expounded the essence of trust and effective management to the attendees at the annual convention. There was also a commercial vehicle panel discussion, about BS-VI and beyond, which was moderated by KVS Prakash Rao, Past President, FADA.

Talking commercial vehicles

The panel discussion on the Commercial Vehicle Sector was on the theme of 'BS-VI and the World Beyond'. The panellists were Amit Mohan, Senior EVP & Business Head- CVs, Kotak Bank; Anuj Kathuria, Chief Operating Officer, Ashok Leyland; Bharat M. Sanghvi, veteran dealer John K Paul; Satyakam Arya, Managing Director & CEO, Daimler India Commercial Vehicles and KVS Prakash Rao.

While Bharat M Sanghvi spoke about the importance of pre-owned commercial vehicles and how dealers will have to look at investments models to thrive, Kotak's Amit Mohan said: "There is an ecosystem consisting of the OEM, dealer, customer and financer. Nobody can grow at the expense of anyone. If one tries to outsmart the other, the damage is caused to the ecosystem."

Ashok Leyland's Anuj Kathuria said, "We meet the emission norms and we do so with the technology suitable for Indian operating conditions. Collectively, we all need to start respecting Indian customer needs, which are different from the global customer needs and are evolving."

Changing dynamics in the two-wheeler retailing

Two-wheelers, the most affordable form of motorised transportation in the country, saw a lively debate in its own panel discussion, which was moderated by Nikunj Sanghi, Past President, FADA. The four panellists were Sajeev Rajasekharan, MD, Harley-Davidson India; Sanjay Bhan, Chief Business Officer, Ola Electric Mobility; Yadvinder Singh Guleria, Senior Vice-President (Sales & Marketing, Honda Motorcycle & Scooter India; and Pranav Shah, Director, Innovative Motors.

With electric mobility the buzzword in the market, Ola Electric's  Sanjay Bhan said, " Swappable batteries and the subsequent infrastructure will soon be up and running to take the two-wheeler  vehicle market forward with full force. The reality is that electric technology is there to stay. But that can happen only if the right infrastructure and ecosystem is in place. Ola is committed to build that infrastructure." He pointed out the need for business models to evolve and two- and four-wheeler vehicle manufacturers to rethink their distribution model strategy."

HMSI's Yadvinder Singh Guleria underlined that the industry needs to decide on the models manufacturers should focus on in urban India and what should the priority be for the secondary network.

Harley-Davidson India's Sajeev Rajasekharan believes that the two-wheeler market will expand, especially scooters. Commenting on the dealership mantra, he said, "The dealer is not just there to provide experience at his cost. He's there because of the RoI that he sees. If he's not experiencing it in the interim because of any problem, he sees the promise that he's going to. Two-wheeler dealers need to focus and strengthen their fundamentals, like what is your stock holding. Look at which models you need to stock, inventory holding and interest cost which you obtained.”

According to Pranav Shah, who believes there is a need to restructure the entire two-wheeler dealership business model to incorporate the transition from BS-IV to BS-VI, said: "The number of dealerships has almost doubled in the past two years. We can merge a few branches and dealerships. Mergers and acquisitions is a way forward now.”

Google says . . .
The session on 'Digitalisation in Auto Dealerships' by Nikhil Bansal, Industry Head - Auto, Google India, was quite an eye-opener in digital India, which is headed towards becoming the third largest economy at a global level by the year 2030.

Nikhil Bansal, Industry Head - Auto, Google India: "In 2016, 48% users researched online to find dealers. In 2019, this has increased to 60%."

Pointing out the massive increase in online research for all products including automotive, he said: "In 2016, 48% users researched online to find dealers. In 2019, the number has increased to 60%. Dealers must take advantage of this situation."

Recognising movers and shakers,
honouring Anand Mahindra and Nikunj Sanghi

Dovetailed with the Auto Summit 2020 were the FADA Awards 2019 recognising the best practices in the automotive retail in India and provide top-performing dealers a platform to showcase their best and bring forth the good work done by the dealerships in various quarters of the business from sales to aftersales to service.

FADA's annual convention also saw Anand Mahindra, Chairman, Mahindra Group, being felicitated with an award for his exemplary contribution to the Indian automobile industry. Likewise, veteran automobile dealer and also president of ASDC, Nikunj Sanghi was conferred with an award for his exemplary contribution to the automobile dealer fraternity.

Awarding excellence
The evening saw 28 winners, across five categories and nine sub-categories across vehicle segment being honoured by the automotive retail body. Dealers across categories like Passenger Vehicles and CV segments were awarded. 

The awards category was split under five major segments and the role of big dealerships, marketing innovations undertaken by them and CSR activities were recognised. The winners were chosen from pan-India dealers who made a difference and are FADA members. 

The event culminated with an interactive and motivational session by former Indian cricket captain, Kapil Dev, who motivated the dealer fraternity with his insights on his cricketing experience and encouraging moments in the dressing room during the 1983 World Cup.