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Old 13th June 2011, 12:46   #1
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Default Average income of Sales guys in Dealership

Recently one of my relative who works in car dealership in Faridabad, came to my house.
During our casual conversation, he talked about his salary and incentive and I was completely blown away when he said that a sales representative earns somewhere around 50-70k per month as incentives if he/she meets the target and also can earn 2-3k daily by cheating customers.
Though it doesn't sound possible as customer would not be ready to pay even a single rupee of what is the on road price of the car, so where would these guys earn those extra bucks from? When I asked more about it, he said that they ask customers to pay extra if customer wants earlier delivery of the car, any particular number for the car bla bla.
He was also looking to change his job. He currently works in Maruti and is trying for VW Dealership and he said that at VW Dealership, one can earn 4000 as an incentive per car.

So here is the question to you all of you-
How much is the average salary of sales representative in various car dealerships, be it Honda, Maruti, Fiat, VW etc and their incentives. Also can they make extra money by cheating customers?

Mods - I tried searching average salary sales reprentative" but couldn't get any result, so if there is a thread exist already, please merge it.
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Old 13th June 2011, 12:57   #2
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Quote:
Originally Posted by anonymous View Post
a sales representative earns somewhere around 50-70k per month as incentives if he/she meets the target and also can earn 2-3k daily by cheating customers.
When I asked more about it, he said that they ask customers to pay extra if customer wants earlier delivery of the car, any particular number for the car bla bla.
I dont think a sales guy can earn so much just in incentives. Although the incentives paid by the dealer is based on the model too. The fast selling one earn less whereas the struggling models of the brand get them a nice amount in the form on incentive. I guess on an avg the sales rep earn about 25-30K a month and this included the incentives too as per my sources.The incentives are also made on the accessories sold.

I was told to pay an extra amount for registration and insurance during my car buys which I flatly refused and the reason given for the jacked up price was the maintenance of dealership & salary of the staff.
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Old 13th June 2011, 13:05   #3
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Default Re: Average income of Sales guys in Dealership

50-75K is too much. Even an MBA fresher doesn't get that much salary. The person who dealt us with while buying WagonR was a B.A.and was paid 12-15K per month and incentives on each car sold through him. I guess BMW, Mercedes guys may get 25-50K as salary as those people are enough qualified.

And yes it is true sometimes customers pay bribe to the sales person to get car/color of their choice.

PS - If it is really true that a sales person get 50-75K salary then why I am doing coding and all and still earning much less. I will leave my job and join some car showroom.

Last edited by bluevolt : 13th June 2011 at 13:12.
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Old 13th June 2011, 13:17   #4
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Default Re: Average income of Sales guys in Dealership

Quote:
Originally Posted by ghodlur View Post
I was told to pay an extra amount for registration and insurance during my car buys which I flatly refused and the reason given for the jacked up price was the maintenance of dealership & salary of the staff.
This may be working for the rural customers as urban customers have more knowledge and can argue but rural customers may get traped in such situation.
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Old 13th June 2011, 13:52   #5
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Default Re: Average income of Sales guys in Dealership

@ anonymous,

Either your relative must be amazing at his job (in which case most dealerships will give him a promotion and he wont be a sales guy no more) or he is shooting porkies. Although I am not sure about the incentives inside the luxury brand showrooms.

The sales incentive is target based which is usually stiff. Contrary to popular belief the money spinning operation is the service department and not sales. Sales departments have to survive interest on ageing stock, inter dealer rivalry, heavy discounting etc... leaving very little for margins and henceforth sales incentives.

The moneymakers are the finance and insurance schemes. High interest auto financiers (Kotak, Muthoot etc...) charge high interest and offer fat incentives as well. Customers who ususally fall for this are ones with poor credit history, rural/outskirts customers, small traders etc... Car insurance schemes also give out decent incentives.

But most dealerships have been smart enough to bring these divisions under their control and garner the related profits, thus making it difficult for sales staff to divert them to outside agencies.

Finally Yes, if the customers are unsuspecting, especally the rural ones, they are definitely taken for a ride and the dealership will juice out the last penny out of them.
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Old 13th June 2011, 13:57   #6
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Default Re: Average income of Sales guys in Dealership

There's a tremendous variation in the salary earned by car sales executive's in India. Average salaries can range from a high of Rs40,000 per month in Northern india (NCR region with incentives) to a low of Rs 5000 per month in Eastern and North Eastern Indian dealerships.

Amongst the three leading OEM's of India, viz, MUL, Hyundai and Tata - salaries do not vary wildly - give or take plus/minus 3k at the most. Incentives for these marques vary between Rs500 per car if you are selling a bread and butter Alto , Santro or Indica V2 to Rs 2000 per car for the most expensive model in that particular OEM's line-up.

The variation is mainly due to the OEM's not controlling the salary disbursal process at the dealership - it is left entirely to the dealer proprietor to fix a salary band. Strictly speaking an OEM cannot fix salaries as they do not "own" or have a "holding stake" in any of the dealerships. OEM's can at the most suggest through their regional offices the desirable salary level to attract talent - which again few dealer proprietors follows.

However, the Indian dealership salary structure witnessed a tectonic shift after BMW commenced their retail operations. The BMW dealer proprietors paid a hefty premium to headhunt Merc dealer sales people and overnight the premium car dealer sales manager's salaries saw an average hike of 50% and in some cases even 100%.
This was copied by VW when it started headhunting from MUL, HMIL and TML dealers. Next was NISSAN and so on and so forth.

It would be wrong to say that all dealer sales people are bent on hoodwinking the customer financially. It is actually the dealership which does that. Typically the areas where a dealership makes money - over and above the commission paid to them by the OEM are:

1) Dealer does the Road Tax and registration for you:
Large amount is made, just notice the difference you ACTUALLY pay as road tax - this amount will be there on your Tax Token disc - and the amount the Dealer charged from you! You will be shocked at the "extra" charged - typically in the range of 6-8k for a small hatch ! And the dealer will not give you a receipt also - they'll typically issue a "debit note" which very cryptically mentions "registration and handling charges"

2) Dealer does the Insurance for you:
A commission is paid to the dealer by the insurance company. Nowadays with the onset of online policy renewals this has largely been standardised.

3) Accessories bought at the dealership
Good amounts are made. more than 20% margin. Max on "TEFLON" coating and underbody coating which many of you would have been asked to opt for at the time of purchase

4) Extended warranty: Target linked. The dealership pays the sales guy who sells the EW. The OEM pays the dealer if EW targets are achieved.

5) Used car exchange programmes: Woo-hoo...!! this is a goldmine for the dealer

Typically a junior level sales executive should earn between 12-15k a month - if he achieves his targets, a sales manager between 25-35k, a senior sales manager/AGM between 40k-50k, GM and above Rs 80K + a month. These are of course average figures and as i mentioned - for the volume OEM's. For the Merc's, Bimmer's , Audi's, JLR's and Porsche dealer's these salary figures will be at least 30% higher.
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Old 13th June 2011, 14:13   #7
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Default Re: Average income of Sales guys in Dealership

I cannot comment on how much these guys are paid through either fixed salary or incentives, but I do know that these guys have some nice means of making more money. One example I recently came across:

Some Mahindra sales guys were buying Boleros, and Xylos in their own names (at a pretty discounted price), and getting them registered as CMVRs and leasing to Fleet operators. The guy I met, already had ten such vehicles running under him. I'm pretty sure he is making a handsome fixed income out of this. Icing on the cake - The downpayment is borne by the Fleet Operator, and he is repaid the same from liquidation at end of leasing lifecycle. Win-Win situation all around.
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Old 13th June 2011, 14:28   #8
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Default Re: Average income of Sales guys in Dealership

My experiences and guesses:
When we bought the Alto, the Maruti Showroom was full of Lady sales personnel.
Very limited knowledge about cars, they were only reading out the specifications. So my guess: 8-10K basic

Then the Ford guy was good in what he did, convinced us to buy the Figo over the Micra and the i20. My guess 15-20K basic

Nissan, the owner did all the selling, no sales guys here.

Toyota - The guys who came over for the test drive had very basic knowledge, did not know what Tyre size the car came in. This was in Mysore. (8-12K)

Hyundai - Same here as well (8-12K)

Yes, they might get paid for the accessories that they will be able to sell on each car.
The Maruti guy sold my FIL floor mats worth rupees 600. (My guess, they would cost 40 per piece), and then he sold the ill fitting pseud leather seats for 7K, and then the reverse sensors that make all sorts of noise.
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Old 13th June 2011, 14:53   #9
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Default Re: Average income of Sales guys in Dealership

50-70K as a sales representative
i guess i am in the wrong job then.
i doubt,if its true,IMHO,its not a high paying job.
@vinya,how can you guess the salary of a sales rep by just judging his knowledge base?
remember 95% customers are less knowledgable than these sales guys

Last edited by akshay4587 : 13th June 2011 at 14:55.
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Old 13th June 2011, 14:58   #10
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Default Re: Average income of Sales guys in Dealership

I agree with @arjab. As per my recent experience, i could guess the dealer is making lots of money in Insurance, Registration and the accessories he is selling along with the car (Floor Mats, Seat Covers, USB cable, Fog lamp etc). The sales person could get a good share on the accessories margin. So their incentive could be higher than their fixed salary based on what they are selling.

I found my dealer is unhappy when i told them i will be getting the Insurance from outside. Initially they tried to convince me with 'advantages', then they told no option of outside insurance. Then when i almost 'walked out', they agreed.
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Old 13th June 2011, 15:42   #11
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Default Re: Average income of Sales guys in Dealership

One of my friend works in skoda and earns around 12k + incentives. he gets around 1500 for fabia , 3000 for laura and yeti and 5000 for superb. some people earn around 40k also on higher positions and also heard from him that they never give the promised amount on the commission


P.S - Off topic but i wanted to know if there any growth in the automobile industry in India

Last edited by moose56 : 13th June 2011 at 15:44.
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Old 13th June 2011, 15:51   #12
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Default Re: Average income of Sales guys in Dealership

Quote:
Originally Posted by akshay4587 View Post
@vinya,how can you guess the salary of a sales rep by just judging his knowledge base?
remember 95% customers are less knowledgable than these sales guys
They were purely my guesses [Hope I was not wrong in putting any numbers across].
We would have interacted a lot with the sales guys when buying a car. From the time of a test drive to the day when you receive the car, and even later.
It was purely a guess based on their appearance, what they wore, how they spoke, their age, qualification etc etc.
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Old 13th June 2011, 16:09   #13
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Default Re: Average income of Sales guys in Dealership

Another Modus Operandi

On models with long waiting lists (fortuner etc) say 6 months, a customer will get a phone call from the SA close to the delivery period. The offer - about 50K drop in the price paid in cash if he chooses to release the car to another customer with an urgent need. A lot of customers choose to do exactly that and don't mind waiting another month and save 50-60K. The released car is sold to the new customer who is charged upwards of 1L for immediate delivery. The difference is pocketed by dealer and SA. This cyclic continues and apparently everyone wins in this situation.

Activas will huge waiting lists are available literally at weeks notice with a 7K premium.
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Old 13th June 2011, 16:13   #14
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Default Re: Average income of Sales guys in Dealership

Someone whom I know earns around 19K working as HR(Recruitment) for Toyota dealership. The salary may be more for metros considering he works in a sub 1 million population city. However considering that I dont think salary for SE will be above 13-15 K in same city. So for metro cities for same brand I guess may be around 4-5 K more per month.
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Old 13th June 2011, 16:46   #15
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Default Re: Average income of Sales guys in Dealership

Had read this article in ET sometime back - It?s all about selling the experience, not just the brand-ET Cetera-News By Industry-News-The Economic Times on Mobile
I hope to catch up with the Porsche salesman's salary a couple of years down the line!
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