[GTO]

Auto manufacturers in India are striving to help their dealers cope with a slowing domestic market, by helping them improve the after-sales aspect of their business, according to the J.D. Power Asia Pacific 2014 "India Dealer Satisfaction with Automotive Manufacturers Index".

The study measures dealer satisfaction with vehicle manufacturers, and identifies dealer attitudes regarding the automotive retail business. Overall dealer satisfaction is determined by examining nine factors: marketing and sales activities, product range, vehicle ordering and delivery, sales team, spare parts, warranty claims, after-sales team, training and support from the manufacturer. The study is based on responses from 658 dealer principals & general managers located in 200 cities throughout India. The study was conducted in association with the Federation of Automobile Dealers Association (FADA), and was fielded between February - March 2014.

Key Findings:

• Only 42% of dealers estimate they will be profitable in FY 2013-2014.

• The situation is more critical for dealerships based in India’s 6 largest metros, with only 31% expecting to make a profit this year (presumably due to higher real estate costs). Given the relatively weak outlook on vehicle sales, dealerships are concerned about the viability of their businesses.

• Automakers are increasingly helping dealers fund their spare part inventories, as 48% of dealers indicate receiving financial assistance to buy spare parts stock in 2014 (up from 41% in 2013).

• Nearly half (48%) of dealers indicate their warranty claims are settled within 15 days (compared with 42% in 2013).

• Warranty labour rates (the hourly rate at which an automaker reimburses the dealership for any work performed under warranty) is reported to be higher this year, with 25% of dealerships reporting warranty labour rates of more than Rs. 300 / hour (up from 18% in 2013).

• Increasing the share of service revenue is one of the ways in which dealers can survive through these tough times. Retaining customers beyond the standard warranty period has always been a challenge for dealerships in India.

Brandwise Results:

Toyota ranks the highest in dealer satisfaction with a score of 925. Toyota performs particularly well in eight of the nine factors. Maruti ranks second with a score of 884, followed by Honda at 869.



NOTE: Included in the study, but not ranked due to a small / insufficient sample size are Audi, BMW, Mercedes, Renault, Skoda and Fiat.

[Captain Slow]

Not very surprised to see Nisan at the very bottom of the list.

GTO, Is there any data showing how happy are customers with the dealerships ? I am sure Nissian/Skoda will end up at the bottom while Toyota and Maurti end up at the top.

[JoseVijay]

GTO, thanks for sharing the above information.

As captain slow mentioned in the above post, the same agency should have also conducted another survey to measure the satisfaction of customers with their respective dealers.

[libranof1987]

Interesting information.

I wonder if this is because of increased penetration in terms of dealer base or a low demand, or perhaps both.

If it's the former, consolidation could probably help.

So many dealers today have dealerships for multiple manufacturers; any idea to what extent they can share infrastructure? To save some cost there.

[SmartCat]

As expected, there is high correlation between how well the company is doing (profitability, sales & market share) and dealership satisfaction. Only Mahindra seems to be an exception.

I guess Honda would've jumped up a couple of places after Amaze, City diesel & Brio launches!

[Mr.Boss]

Adding the Contributing factors

[drmohitg]

Interesting thread. Quite a huge difference between the number one and two. Was this also conducted for the luxury brands.

[GTO]

Originally Posted by Captain Slow

GTO, Is there any data showing how happy are customers with the dealerships ?

Originally Posted by JoseVijay

As captain slow mentioned in the above post, the same agency should have also conducted another survey to measure the satisfaction of customers with their respective dealers.

Yep, JD has been monitoring after-sales quality since a long time (although I don't agree with their results). Here is one of the many threads.

Originally Posted by drmohitg

Was this also conducted for the luxury brands.

Included in the study, but not ranked due to a small / insufficient sample size are Audi, BMW, Mercedes, Renault, Skoda and Fiat.

[2000rpm]

Hi GTO,

Most points mentioned in your post are accurate. In case of Co-Dealers, the lesser preferred dealer is generally struggling for profitability. And yes, with increasing service frequency the revenue from service has also started diminishing, though longer warranty periods ensure that vehicles keep coming to authorized workshops for a longer duration.

But yes, most dealers are living hand to mouth in today's scenario. I am sure most dealers with less than 25-30 vehicle sale every month (in tier 1 cities) will be struggling for profitability.

[Srikanthan]

Interesting. More than the dealer, I will look for such satisfaction from the service stations. I'm not sure if service stations are included in this survey.

In my opinion, a dealer does not play a "great" part in selecting a car. However, the service quality matters most.

Personally, when one dealer let me down in Chennai, I selected the next one - Bu I did not change my selection of the car.

[abirnale]

A very good insight, thanks for the thread.

Although financial focus, the finding in the survey is pure indication of how brands are doing too. And as rightly pointed out the reasons for higher costs or inability to score profits is largely due to real estate in these metros.

For customers, close proximity to the dealership workshops is an important factor and that probably forces to setup multiple workshops in the close proximity. For example, in south Bangalore Maruti has more than 5 dealer workshops in just a part of Bannerghatta road area viz. Sagar (2), Kalyani, Mandovi, Bimal. And all of these stations occupy large spaces!

It's high time that dealers and automakers put additional effort in innovating more ways to combat the situation. One such example is service at customer's door. The routine service takes no more than 2 hours on an average and a distant workshop can smartly plan their "service rounds" effectively without incurring too much cost on maintaining the costly real estate.

Another area the dealer can focus is attracting more customers than FNGs since literate metro population generally scouts to the FNGs post warranty servicing. This is where they spend more and dealers tend to lose that for many reasons

Nevertheless, lets hope for better year ahead for everyone - the enthusiasts as well as dealers and obvisouly automakers!

[latentpotential]

Thanks for the data, it is very interesting, and in some ways can re-affirm or dispense-off opinions one may carry regarding various brands and their attitudes towards our market.

Would it be possible to share the entire pdf document that contains more data on this survey?

[rajeshsundaram]

Mahindra's rating which is below the Industry Average is not surprising for me now. In Anant Car's ASS lobbies, there are posters which talks about "Care" "Service" bla bla blaah, and even Dr.Pawan Goenka features in one of the posters. But still, their ranking is way down.

My experience with Mahindra A.S.S is just average. Most of the time dealers stock less number of parts or have to order and wait for a week. Looks like oils and lubes are the ONLY readily available options in most Mahindra A.S.S.

[Soumyajit9]

Originally Posted by GTO

• Warranty labour rates (the hourly rate at which an automaker reimburses the dealership for any work performed under warranty) is reported to be higher this year, with 25% of dealerships reporting warranty labour rates of more than Rs. 300 / hour (up from 18% in 2013).

Well, this point caught my attention to the most !!

So is that the reason why it takes 5 days for a part to arrive and another 2 days to fix the part into the car ? More specifically, the reason for 2 days to fix the part in the car is evidently clear now !!

Rs 300/hr X 16 Hours (8 hours per day X 2 days) = A lot of money !!

Someone, please correct me if my calculation / working style of a SC is wrong.

[i74js]

Originally Posted by Soumyajit9

Well, this point caught my attention to the most !!

So is that the reason why it takes 5 days for a part to arrive and another 2 days to fix the part into the car ? More specifically, the reason for 2 days to fix the part in the car is evidently clear now !!

Rs 300/hr X 16 Hours (8 hours per day X 2 days) = A lot of money !!

Someone, please correct me if my calculation / working style of a SC is wrong.

Nope, the number of hours for part replacement / fixing is fixed by manufacturer and thus your calculation may not hold good.

For example, the single rear shock absorber unit replacement for Verna gets 1 hour labour paid by HMIL which includes removing old one, fixing new one and testing. Bigger jobs like steering assembly replacement gets considerable labour payment by manufacurer (when carried out during warranty) but even that is to the tune of few hours only and will not run into days.