[GTO]

Originally Posted by KrishD

Maruti is working on improving profitability, with both reduced costs and increased pricing

Thanks for sharing! In RC Bhargava's Maruti book, there's a couple of pages on the subject of improving dealer profitability (finance, insurance, accessories, spare parts etc.).

Originally Posted by ajmat

A good midrange SUV will help Maruti. Large cars do not cut it for the brand although the SX4 replacement could challenge the forthcoming Honda City (next big battle!)

Maruti's 1+ million rupee cars don't sell.....but not because of branding. Fact is, they are substandard / poorly positioned products. The Grand Vitara had no diesel and poor interior quality (including Swift parts). The Kizashi is way too over-priced and doesn't have a diesel either.

Hyundai (Elantra) and Mahindra (XUV500) have proven that mass-market brands can attract Rs. 15 lakh customers, as long as the product is right.

Originally Posted by KPS

Profitability at Hyundai dealerships has translated into larger and better 3S facilities (as seen in Bangalore) and the customers have a better buying experience.

Totally agreed

Higher earnings will bring superior facilities, better quality staff, more $$$ on training and the like.

Originally Posted by girishglg

Wow Parry, a very nice piece of information indeed. The next logical thought to this is how much do these dealerships make from selling each car and their ROI model.

Related Thread

Originally Posted by stalwar

the data doesn't account for the DSA/associate sales (sales that happens outside the dealerships)

These are still delivered through dealers (directly or indirectly). Manufacturers don't sell directly to DSAs.

If the dealers won't be making money (and they are hard core businessmen, not enthusiasts - true in ~80% cases) they would have shut shops and moved on.

I know a couple of loss-making dealerships in Mumbai. And the owners are very happy. They only use it as a channel for black money.

[zenren]

Hyundai numbers came as a pleasant surprise. I was expecting Hyundai to have a lot more than 350, considering their popularity even in rural crowd. I've come across a lot of places where you've got Hyundai showrooms but no Fords or Chevys.

It would be interesting to see if the dealer-service network metric would be different if we take the numbers as 'area with presence', especially for Ford and Chevy. Ford has multiple dealers in bigger towns meaning there are more towns where Ford doesn't have a presence.

Is this the count of dealers alone or does it take the authorized service centers (without dealership) also into account?

As a prospective customer, I don't really need a dealership within 25km from my house, since I'll be going there only during the car purchase. I'll be okay even if it is 100-150km away. However, a competent and authorized service center should be pretty close, preferably within 10km from my home or office since I cannot drive my car over a long distance, especially when something seems to be wrong.

[zenren]

Originally Posted by zenren

It would be interesting to see if the dealer-service network metric would be different if we take the numbers as 'area with presence', especially for Ford and Chevy. Ford has multiple dealers in bigger towns meaning there are more towns where Ford doesn't have a presence.

Just noticed Ford ad in today's newspaper, they've mentioned 142 cities and 265 sales/service outlets.

BTW, Maruti has 2971 service outlets as per their site.

Source: http://marutisuzuki.com/service-network.aspx

[akhilesh51]

Originally Posted by parrys

NOTE: If any of you can, please share (with source) the exact number of dealerships for the brands marked with an * here. Thanks!

Currently, there are in excess of 500 dealerships of Tata Motors Passenger Business Unit which when compared to their sale figure of 160K vehicles (annual) provides a rather dismal per dealer average of 26 vehicles/month.

[drsingh]

Originally Posted by zenren

Hyundai numbers came as a pleasant surprise. I was expecting Hyundai to have a lot more than 350.

Hyundai is well represented in the suburbs /rural areas.I have atleast seen two Hyundai showrooms in Punjab that seem to be 'in the middle of nowhere '

^^^^^^_ Total no. dealerships may be misleading, I know for a fact that the Tata,Mahindra,Chevrolet dealerships at my place are just subsidiaries of dealerships from a bigger city.They don't have display models per se. The actual test drive vehicles are rotated between dealerships, vehicles for delivery are often driven to this dealership from the bigger dealership. Etc.etc.

[Rajeevraj]

Is there any way of getting the top 5 or 10 dealers/cities per manufacturer based on volumes?
It would be interesting to see the preferences/bias in specific areas. For example, my hometown Calicut in Kerala is I think a Tier 3 city, but both BMW and Audi have a showroom there and generate good volumes from North Kerala. Pretty sure they outsell some of the lower selling mass market models. Another hunch I have is that VW sells pretty well in Bangalore when compared to other places.

[arin_12]

This is my little observation on the Dealership mapping in the particular zone where I visited last year. I found that the whole 100+KM radius there is no service center. If you get stuck somehow you might end up spending 1-2 days to repair your vehicle. I think the company should look forward some alternative to provide some kind of support for this region.

Complete region


Ford

Chevy

Toyota

[GTO]

JD's latest results. Unsurprisingly, dealerships are happiest with brands that have selling products.

[GTO]

Interesting stats in this article.

Consider the stats: Hyundai has a market share of 17.38% with 512 outlets in 276 cities. At number 3 is Mahindra & Mahindra, with a market share of 8.27% and 291 outlets in 212 cities. At fourth position, Honda has a market share of 6.88% with 265 outlets in 170 cities.

At fifth, comes Tata Motors, which has a 5.36% market share with 311 outlets across 200 cities and at sixth, Toyota has 4.77% market share with 213 outlets in 140 cities.

And Ford at number 7 has a market share of 2.87% with 376 dealer touch points across 209 cities. The total outlet tally of the six competitors nearly the same as Maruti's outlet strength if the Nexa network is combined.

[avdhesh15]

Originally Posted by GTO

Interesting stats in this article.

Some random figures for analysis from our monthly / annual sales threads and the dealerships article (Renault figure is estimated):
1. Maruti / Hyundai are slowly and steadily increasing their cars per dealer figure but somewhere I believe considering higher prices for Hyundai, their revenues / profits might be higher.
2. M&M and Renault have shown considerable increase in cars per dealer based on new launches.
3. Ford has a vast dealership but sales are very less in comparison to others.
4. Tata / Toyota have reduced their cars per dealer but I expect this to pick up with launch of Tiago, Innova etc. Honda has shown a slight decline and future seems iffy for the company especially considering the lack-luster launches and quality issues of late.

[GTO]

An Economic Times article cites the examples of a few struggling dealers.

Manish Aggarwal recently ended his five-year Volkswagen dealership, SM Autokraft in Guwahati, and has taken a Honda dealership by the name of Paramount Honda. Even six months after Aggarwal served notice, Volkswagen wasn't able to find a replacement dealer for the city, which is considered the gateway to the north-eastern states.

"There were no new model launches, which resulted in huge loss," Aggarwal told ETAuto over the phone.

[timuseravan]

Originally Posted by GTO

An Economic Times article cites the examples of a few struggling dealers.

I had no idea dealers had just 3-4% margin per car. I just did a quick calculation for my Mahindra dealer with this margin and average sales/dealer and their monthly revenue must be just 20-25 lakh. With the real estate prices/rentals and salaries in Pune they must be barely profitable.

No wonder they aggressively push accessories and insurance at twice or thrice the price with threats of warranty.

[GTO]

Originally Posted by timuseravan

I had no idea dealers had just 3-4% margin per car.

Over and above the margin, the dealer makes money from insurance, 'handling charges', financing, accessories etc.

Then, the real money starts rolling in from servicing & repairs.

[arnabchak]

Originally Posted by timuseravan

I had no idea dealers had just 3-4% margin per car. I just did a quick calculation for my Mahindra dealer with this margin and average sales/dealer and their monthly revenue must be just 20-25 lakh. With the real estate prices/rentals and salaries in Pune they must be barely profitable.

Hi
Its not the sale of the car that actually matters to the dealer.It is the add ons which count.More often than not, if the sales experience has been positive, one tends to stick to the same dealer for service and add ons. It is therefore imperative for the dealership to ensure that the sales experience is good.
Additionally, the dealership also makes money in insurance, claims and also in parts. Overall, depending on the model and the dealership, the margins will not be as thin as 3-5%. The initial investments are humongous though(in excess of 1.5 crores, depending on the city and location). margins will also be dependent on the loan availed/self funding as interest payables will certainly dent the profitability.

[S.MJet]

Came across this article in ET Auto. (Note: the article is about Nissan’s condition in India).

Average revenue per dealerships chart from the article.

Interestingly Toyota dealers are sitting at the top, ahead of Maruti dealers, though margin is not significant. Nissan at the bottom.


This is only vehicle sales data, other revenues streams like service, insurance commission, accessory sales etc. are not included.