Indian auto market is hot and happening. It is sizzling with bright promises that make now even the auto dealers and retailers from around the world to line up at its doors to get their first entry pass.
Several auto retailers and international dealership networks are constantly in touch with renowned auto makers to set up their dealerships in India.
AutoNation, America’s largest auto retailer; Inchcape, UK-based multinational chain; Saud Bahwan, Oman’s largest car dealer; and Al Futtaim Motors from UAE have already approached leading car makers like VW, Honda, Toyota, BMW et al to set up their dealerships in India. While the market in India looks too lucrative, the reality is that the country does not generate volumes for such dealerships.
Margins for auto dealerships in India are only 2-3 percent while in overseas market it is 12-15 percent. Professional dealerships demand volumes which no auto maker in India is ready to promise. Last year, Indian auto sales were only 1.4 million units against 13.6 million in China and 10 million in the US.
Even after such bleak figures, these dealerships are still keen to set up their base in India mainly due to set back received in their home grounds due to recession. Secondly, Indian promises to be the next best market including Russia, Brazil and China. BRIC will constitute nearly one-third of global auto sales in next four years.
