JD Power study expects that auto dealers will record a fall in profits

author image CarTrade Editorial Team
Saturday 01 June 2013, 12:14 PM

As the Indian passenger vehicle market has been witnessing one of the slowest years in the last ten years, the business of opening a new showroom seems dwindling. As per JD Power Asia Pacific 2013 India Dealer Satisfaction survey, it is anticipated that one in every five dealers will record a loss in the fiscal 2013. According to the survey, only 44 per cent dealers are expected to record a profit in the financial year 2013.

Mohit Arora, the Executive Director of J.D. Power Asia Pacific, was quoted as saying, “Declining profitability for dealerships in India not only highlights the impact that the slowdown in new-vehicles sales has on the viability of a growing number of dealers, but also underlines the importance placed on auto makers to provide adequate support to their respective networks.”

Reportedly, the 2013 India Dealer Satisfaction with Automotive Manufacturers Index (DSWAMI) StudySM has been based on the response of 618 General Managers of showrooms of almost all the big players of the market. Interestingly, this study was organised in association with the Federation of Automobile Dealers Associations (FADA). This data was recorded between the tenure of February 2013 and April 2013.

In this study, the overall dealership satisfaction has been zero on mainly nine factors, namely marketing and sales activities, product, vehicle ordering and delivery, sales team, parts, warranty claims, after-sales team, training and support from the auto maker. According to this study, the main sources of revenue for dealerships are from service ,which accounts for 29 per cent, sales of new vehicle (28 per cent) and spare parts (14 per cent).

In the list of auto makers, which were included in 2013 survey, Toyota and Maruti Suzuki India Limited performed well in delivering overall customer satisfaction. Also, the dealership network of both the auto makers has enhanced a lot in comparison to the year 2012. On this, Arora further said, “The success of Maruti Suzuki and Toyota not only demonstrates the automakers' commitment to ensuring the dealers' operations are viable, but it also their active support regarding such areas as training, marketing and sales activities.”

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