More Than 21% Automotive Dealers Expect Poor Financial Performance In 2019-20: Study

More than 21 per cent dealers across the three automotive segments - passenger vehicle, two-wheeler and commercial vehicle - expect their financial performance to be poorer in the recently concluded financial year compared with the previous year, according to a study, the findings of which were announced today. The study was conducted by J.D. Power, in partnership with the Federation of Automobile Dealers Associations (F A D A) India and the findings say that among those who expect a poorer performance this year, 71 per cent say that they did not achieve their revenue target for the year. Furthermore, more dealers this year indicate their revenue will be below target 36 per cent this year compared to 33 per cent last year. The 2019 study is based on responses from 2,448 dealer principals or dealership general managers located in more than 200 cities throughout India.

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Ashish Harsharaj Kale, F A D A President, said, "Dealership business is facing its toughest challenges in recent times and the entire business model needs an overhaul to keep up with the changing dynamics of our trade. This is the first joint survey between J.D. Power and F A D A and we have received a high number of responses from our members. We are hopeful that the findings of the survey will act as a beacon for the entire automotive ecosystem, leading towards a healthier business environment for the Industry, especially for the automotive dealer fraternity at large,"

However, there were other findings too. The study noted that online purchase of vehicles is seen as an important future trend by 31 per cent of all dealers across the three segments. In addition, 43 per cent of dealers believe that investment in digitalsation is likely to bring about a reduction in manpower costs for their business.