Re: Tata Motors aims for a top 3 spot in PV sales! Quote:
Originally Posted by UB_007 While discussing with a close friend of mine having a Tata PC dealership, mentioned that Tata's business development team is strongly pushing its dealers to pump in more investments in their dealership to improve their outlook. The team is relying on the current sales volume and the expected trend.
Dealers are reluctant on making any additional investments. The reason is evident that while countrywide sales have seen good numbers, many dealership sell not more than 10 to 15 cars a month and some close to 40.
With low margins in new car, service is what dealers seek for to make some profits and there is always a break even where if the dealer service a certain number of cars a day then there is a return of invest. |
Honestly this low sales volumes leading to dealers milking existing customers for margins is a vicious cycle - this leads to lesser customer satisfaction, and lower resale, as service costs also get negatively impacted. But at the same time, I can understand the dealers apprehension - tata has cried wolf about the situation improving every time there was a new product launch (remember the same talk for both the vista launch, and the zest) And dealers having burnt their cash, might be a bit apprehensive.
Having said that, why not onboard more dealers? currently, tata dealerships are a bit of an oligopoly in most cities, and consequently, none of the dealers try too hard to beat each other. Current Dealers are happy to take the leads that come in, and and are not bothered in any way to compete. You might say the current volumes are not enough to justify more dealership , but i would say, look at the market. I am sure if some of them tried hard enough, you could get more marketshare, and the current dealers 'survival mode' sales strategies may be what are keeping your numbers this way. And they dont place any additional risk on tata motors, other than negatively impacting relationships with existing dealers - but if you remember, they are the ones who are thinking this won't happen, and what better way to prove them wrong?
Most car brands are in similar situations, but if tata wants to do something about it, they can, instead of trying to squeeze dealers even more
Last edited by greenhorn : 17th January 2018 at 12:39.
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