What many may not realize is most of the already established industrialists within the automotive field OR from outside it, are the ones owning car dealerships today.. for example :
TAFE Access - Amalgamations Group, tractor and battery makers.
TVS Sundaram - TVS Group, industrialists, 2 wheeler manufacturers and married to the Amalgamations Group.
Advaith Group/Akshaya Motors - One and the same, banker owned.
Navnit Motors - A massive cross-structured group spanning finance, insurance, infrastructure,sports etc. The biggest luxury car seller in the country.
Landmark Dealerships - dealers of Fiat, Renault, VW, Nissan, Leyland, Mercedes, Fiat, Datsun, Leyland, Jeep etc along with related businesses in insurance and wealth management.
Trident - Deals in Hyundai, Honda, Renault, Isuzu etc.
Berkeley Motors - Deals in Mercedes-Benz, Hyundai and TATA Motors, banking-associated family.
As it stands and as it always will be, car-dealerships run on rotation and that rotation comes from sales. Sales give the sales-executives their bonuses and commission, it helps pay the rent, it increases revenue by baiting the buyers into service, etc etc. To withstand tough times, and I assume that the period immediately following demonetization where all transactions involving vehicles were monitored, would be easy only for people of a certain net-worth else it would be nothing short of a nightmare for ordinary people.
I'm a process-management guy, right from my first job involving ERP but the computer side of things bored me to death so I decided to indulge in the glamour (or not) of real-life PPP, though the nasty software is catching up with everything.. not a finance guy either, numbers put me to sleep faster than anything else.. but even to me the automotive dealership business would be a nightmare in terms of coordinating teams, HR people, marketing people, interacting with the manufacturers, handling delivery issues, service issues, getting flogged like hell on social media etc, no wonder there is never directly a face when it comes to elevating issues.
Not pointing to ANY dealer in particular but from my experience car buying has to be one of the most ridiculous buying experiences in my life, because :
- No fixed pricing.. a few thousands here and there depending on factors like corporate discount, exchange bonus, association with the dealership etc.
- Spiked insurance rates, and they are spiked how, up to nearly 5 digits per car versus getting a rate yourself from the insurance company directly.
- Service is one treacherous area, be prepared to handle a few dozen problems a day from an owner point of view.
- The most money is made from service via unnecessary additions to service bills (yes, I'm looking at you - decarbonizing, body treatment, teflon coating, engine bay dressing and early clutch/brake/air filter replacements).
I know once the corporate machine gets rolling then the operations will get easier but it never is that easy.. I find most of them are at meetings, target planning, discussions, negotiations every waking moment. I wouldn't be part of this line even if it paid me heavily. Most of the margins and profits, according to what I know, and what is rightly shown in this thread, are from shafting. Then there is more - handling insurance, repairs, inspecting as to what qualifies for warranty and what doesn't, reaching out to OEM's for suggestions, feedback, quality assessments.. my god.
I love business in general but not this one. My views as a customer, walking into a car dealership is as simple as this :