FADA Conducts Dealer Support Satisfaction Study During Covid-19 Lockdown

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The Federation of Automobile Dealers Associations (FADA), the apex national body of Automobile Retail in India today released Covid-19 Dealer Support Satisfaction Study in association with PremonAsia, a consumer-insight led consulting & advisory firm based out of Singapore. The coronavirus (COVID-19) outbreak is causing widespread concern and economic hardship for consumers, businesses and communities across the globe. India is not untouched as Indian Auto Industry which was already facing a downturn for 15 months, was taken by surprise with the entire country shutting down.

Official statements

Commenting on the release of the survey, FADA President, Mr. Vinkesh Gulati said, “Even before Covid-19 pandemic hit us, the Indian Automobile Industry was grappling with a prolonged slowdown. In fact, we were already degrowing for 15 odd months. Against this backdrop, Covid-19 outbreak has been a significant blow to the Auto Industry and especially to Auto Dealers which had almost broken Auto Dealers’ backbone.

Fada study

He also added, “Many OEMs came forward during these testing times and offered support to dealers with various means. FADA hence undertook this study and our findings showed varying degrees of difference. While some dealers were better off, some received almost nothing in such trying times. It hence became very essential for FADA to gauge how the principals treated their channel partners, their first customers. 46% Dealers had 2 biggest concerns viz., support towards future business evolution and support towards re-starting business post lockdown. Also, what came out commonly across all the verticals was that Dealers expect OEMs to Improve their Profitability!”

Fada study (1)

Post completion of the survey, PremonAsia Founder and CEO, Mr Rajeev Lochan said, “The expectations of the dealers can be divided in two parts. Support during the crisis revolves around how OEMs have responded in managing aspects related to customer communication, dealer manpower engagement & training, and financial support (particularly in terms of negotiating better deals on working capital & term loans through banks). In regard to the future, there is a common concern that the customer engagement process will get far more digitized which, in turn, will impact dealer’s manpower efficiency, processes, and cost structure. Hence, OEMs who can proactively realign norms around these aspects are going to find greater traction among their dealer partners.”

Fada study (2)

“All segments of the market have recorded a weak satisfaction score below 600 which is understandable given that no one can be prepared in advance for handling such a calamity. However, OEMs like Kia Motors & Toyota Kirloskar (for 4W mass market), Audi (4W luxury), Hero Motocorp (2W) and Mahindra (CV small & light) have met expectations of their dealers relatively better than others. A common thread lies in how these OEMs have managed hygiene issues of support on areas of customer communication and dealer manpower training, while pleasantly delighting their dealers through better term loans to tide over working capital needs.”

Fada study (3)

COVID-19 has led to an unprecedented challenge for the automotive retail business. To tide over this challenge, automotive OEMs have extended some form of support to their channel partners. However, this support has been of varying degrees. To understand the dealer expectations and satisfaction with the OEM support on various aspects, F A D A wanted to run a study. PremonAsia, a specialized automotive advisory firm, conducted a pan-India online study covering dealers from all segments of the market – 4W Cars & UV (Mass market)/ 4W Cars & UV (Luxury)/ 2W (Scooters/ Bikes)/ 3W/ CV (Medium & Heavy)/ CV (Small & Light).

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