Dealer viability is the biggest concern, says FADA Study

The Federation of Automobile Dealers Associations (FADA) on July 29 announced results of its Dealer Satisfaction Study 2021, which was undertaken in association with PremonAsia, a consumer-insight led consulting and advisory firm based out of Singapore.

At the overall industry-level dealers attach high importance of 27 pc on business viability, making it a highly critical aspect where OEMs need to exhibit greater sensitivity.

On the positive side, dealers feel that products, both in terms of quality and range by and large meet the expectations of end-customers’ current needs. While dealers of mass market PV remained most satisfied with an average of 720 on a scale of 1,000, three-wheeler segment scored the lowest, 610 on a scale of 1,000 among all segments.

In four-wheeler mass market segment, while dealers raised their concerns about OEMs not being receptive to their inputs for keeping viable and long-term policy in mind, they also said that OEMs provide adequate training for frontline sales & service staff thus keeping the end customer satisfied.

In four-wheeler luxury segment, the study found that training cost sharing arrangement by the OEMs was unsatisfactory and OEMs ability to fulfill vehicle order in correct specifications and quantity coupled with non-flexibility to choose workshop equipment’s were cause of major concerns. The study also found that extended warranty policy and customer handling process were at satisfactory levels.

In two-wheeler segment, the biggest concern which the study highlighted was OEMs were not open to dealer inputs in terms of improving dealership cost structure from viability and policy point of view. Similarly, there was no support from OEMs on buyback of dead stocks of parts. On the positive side, the study found that OEMs were fair in acceptance and rejection of warranty claims.

The study for commercial vehicle segment showed that while OEMs need to handhold dealers in improving sales efficiency and controlling cost of sales, they were quite happy about the overall product range and quality of fully-built vehicles. Dealers were also satisfied as they could directly communicate with OEMs’ senior leadership team for discussing business viability and long term policies.

Commenting on the study, FADA President, Mr. Vinkesh Gulati, said, “OEMs need to be cognizant of the evolving dealer expectations. While issues of concern such as dealership viability, support on sales and after-sales, openness to dealer inputs in decision-making and designing long-term policies are fundamental needs, there are clear signs that dealers expect their respective OEMs to go beyond.”

Mr C S Vigneshwar, FADA Secretary and Chairman DSS-21, said, “I am thrilled to say that FADA took more than 2,000 samples, the highest ever number which has been used for such a study in India. The survey being filled entirely by the Dealer Principals or their CEOs is a testimony of its accuracy and coverage of all aspects of dealerships in detail.”

Mr Rajeev Lochan, Founder and CEO, PremonAsia, said, “The industry average satisfaction score of 657 indicates that OEMs have a significant headroom to improve in meeting the needs of their channel partners, particularly for the two-wheeler and commercial vehicle segments.”