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Old 4th April 2011, 14:36   #1
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Default Global carmakers snatching away distributors from domestic rivals

Came across this interesting news hence thought of sharing!
Volkswagen, Mercedes taking distributors of Maruti, Mahindra & Mahindra - The Economic Times
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Old 4th April 2011, 17:19   #2
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Default Re: Global carmakers snatching away distributors from domestic rivals

Well thats nothing new to it.
Remember all the products go thro this cycle. and the car industry is not an exception.
The more the new entrants come, the more such movements happen thats good for the consumers and economy even.
The words used by ET like Snatching, is just to make sure they catch attention. Its just a way business runs.
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Old 4th April 2011, 18:30   #3
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Default Re: Global carmakers snatching away distributors from domestic rivals

I seriously don't understand why "Maruti Suzuki" is being branded as a domestic player. It is just the Indian name for the Suzuki Motor Corporation which is as much multinational as Hyundai or Toyota.

Besides, the article cribs about auto dealers of MNCs including those of Renault comprising 50% of the dealerships. What rubbish!
Renault doesn't have a single dealership in the country!
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Old 4th April 2011, 19:27   #4
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Default Re: Global carmakers snatching away distributors from domestic rivals

This is nothing new. As options are increasing for customers, so are options for dealers. As a matter of fact, unless its an established dealer, most new dealers don't make it past the 2 year mark as auto distribution is a very competitive business with the actual margins being on service and not on sales.
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Old 4th April 2011, 20:01   #5
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Default Re: Global carmakers snatching away distributors from domestic rivals

Super article, thanks for sharing.

The joke goes that, Mercedes owners felt right at home in the (then) new BMW workshops in 2007. Reason? More than 1/2 the service advisors were snatched from Mercedes Benz

Seriously though, the power of bargaining has moved from manufacturer to dealer. It's the latter who has a choice now. Investing in a new dealership requires at the minimum 15 - 20 crore rupees, and not too many entrepreneurs are willing to shell that kind of $$$ out for the slim margins. In what is, admittedly, a headache of a business. The MNC brands are falling over each other in wooing dealers with thicker margins, authorised used car branded outlets (which are a HUGE profit center), cheap finance, training etc.

While Maruti has successfully retained a large part of its network, Tata Motor's been awfully in the news for losing out on some good dealerships.
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