Currently, and as a potential hatchback customer, you would have to travel 30 minutes to test-drive a Santro. Then another 20 to get a feel of the WagonR. And yet another distance to drive the Chevy Spark.
First, Tata shows the way to commoditise a car with the Nano. Now it’s the turn of the manner in which cars are sold in India with Ex-MUL CEO Jagdish Khattar and his proposed multi-brand car dealerships. Think about it, when was the last time you bought an electronic item (refrigerator, TV etc.) from a single brand store? He intends to rope in large real estate players for the infrastructure, and insurance companies to make these as their preferred workshops. Rumors suggest that Khattar will most probably start with service facilities, and then venture out into car retail. I don’t think so; it would be best for him to start with retail as well as service from day one. Single brand car dealerships can be unprofitable in small towns, which could be the ideal starting avenue for these multi-brand dealerships.
Potentially, there is immense additional value to be had by the customer. Not only can you test-drive multiple cars at the same location, but you could expect an unbiased attitude from the sales person as well. When brands are competing on the same shelf, better prices are a given! The downside is the non-specialised nature of these dealerships. How well would salesmen know the attributes of 5 hatchbacks, when most of them don’t even know a single brand well enough? In-depth training will be crucial, along with strong ethics to resist pushing a particular product, only because of relatively higher incentives.
To the dealership owners, it only gets better as the fixed and operating costs are covered across various brands. Existing dealership owners are plain frustrated with the costs and wafer-thin margins on sales. On the flip side, smaller dealers would get thrown out of the market, unless they receive some lifeblood from the manufacturer.
Multi-brand dealerships must excel at customer service and comprehensiveness in product range to succeed. Khattar will require a significant amount of support from car manufacturers; question is whether they will extend this to a multi-brand? Such a concept gives more presence…..yes. But those manufacturers with an inflated price tag or a compromised product may not be that keen to participate, for obvious reasons. Also, some of them exercise so much control that they don’t even sell spare parts in the open market. Will they let Khattar used the all-too-important "authorised" tag. Will they extend warranty coverage to these outlets?
We will surely see this concept work in the smaller towns. But it is in the metropolitan cities where the doubt lies. Challenge : Put simply, would you rather get your SX4 serviced at a dedicated Maruti workshop, or at a multi-brand one that has a more general attitude?
Source :
FAI