Sewells’ India dealer confidence index indicates caution across vehicle categories

The Sewells Group says that optimism levels of dealers across all vehicle categories have tempered slightly as compared to results at the end of the last quarter of calendar 2013.  

As per the results of Sewells' fourth Automotive Dealer Confidence Index (ADCI) survey for India, the final edition for 2014 captures sentiments of auto dealers in the October – December quarter, the overall ADCI stood at +7 compared with +14 at the end of 2013. Thus the index at end-2014 represents a substantially more optimistic sentiment than at the start of the year.

The ADCI at the end of October-December quarter of 2014 is calculated on the basis of the survey conducted at the beginning of January 2015. The results were based on responses from 172 dealers, across 125 cities, representing 31 different brands.

Highlights from the survey are as follows:

- Passenger car dealers continued to remain optimistic about business prospects inspite of a duller-than-expected festive period. The index for passenger cars segment stood at +9 at the end of October-December quarter, as compared to +8 at the end of July- September quarter.

- The index for two-wheeler dealers saw a significant dip in the October-December 2014 quarter when compared with the July-September quarter of 2014. The index moved from +35 at the end of the July-September quarter to +10 at the end of October-December quarter of 2014, indicating a drop in optimism levels of the two-wheeler dealers.

- Commercial vehicle dealers, who had indicated some signs of revival in the previous survey, seem to continue remaining guarded about business prospects over the next six months. The index stood at -19 at the end of October-December 2014 quarter as compared to -3 at the end of July-September 2014 quarter.

- Overall, the ADCI at the end of October-December quarter stands at +7 indicating an optimistic sentiment. However, the fact that it has dropped from +14 at the end of the previous quarter points to a slight tempering of dealer sentiment.

According to Jayesh Jagasia, CEO of Sewells Group India, “The formation of a majority government at the Centre resulted in a spike in optimism across the automotive retail trade earlier in the year, and we are now seeing some of this enthusiasm get tempered by market realities. An impending cut in the interest rates and falling fuel prices are potential drivers of continued optimism at this point. That said, the Sewells Group ADCI at the end of 2014 does indicate that automotive dealers, while positive, are approaching 2015 with a hint of caution.”