[indian21r]

Did DSK really close the dealerships. I was under the impression that they were one of the biggest Toyota dealers across the country.

What is surprising is that even Maruti/Toyota Dealers are shutting the shop. I guess the cost of running a dealership has become prohibitively expensive in the cities. In a way the move by Maruti to own the real estate for dealerships is a master stroke. It reduces the financial burden of the dealerships

[mints21]

Thanks to a Team-BHP Fan (who prefers to stay anonymous) for sending this information in. Heartfelt gratitude for sharing it with other enthusiasts via this Team-BHP page!

Raj Hyundai is still operational and have their showroom at Malviya Nagar, New Delhi.

Galaxy Toyota is one of the leading Toyota dealer of Delhi and they have just relocated from Kotla Mubarakpur, Defence Colony, New Delhi to Lajpat Nagar Part IV, New Delhi. The reason for relocation was congestion in the area, small size of showroom and lack of proper display space.

[R2D2]

Originally Posted by indian21r

Did DSK really close the dealerships. I was under the impression that they were one of the biggest Toyota dealers across the country.

DSK-Toyota was a very successful and might I add a fantastic benchmark for all automobile dealerships. They closed down 2 years ago not because of a business downturn but because of diversion of funds and several other business malpractices. The owners were sent to jail. Read more:

Pune’s DS Kulkarni case: Justice in slow lane, investors in a jam

[ferrarirules]

I tend to disagree with the perspective of a slow down is because of economic downturn. This is because the sales boost was based on short term factors. The dealer shutdown is mostly due to dealer malpractices.

Sales slowing factor
According to me the biggest factor that was fueling this growth of car sales. There was a high sales of cars for the taxi segment specifically for brands like Maruti, Hyundai, Honda and Datsun. This was because of advent of Ola/Uber. Everybody knows the initial exponential growth of Ola and Uber has stabilized now. Why it has slowed down because the excessive incentives being offered by these companies have reduced so taking a new car and putting it in Ola Uber is not a big proposition.

Dealers being shutdown
People are listing names of groups like DSK or Riddhi Ford, Hyundai Motor Plaza, Delight Honda (They were owned by the same person), Audi and Porche Gurgaon, Nawab Auto Skoda. We have threads here in team bhp where it was discussed that these dealers shutdown because malpractices not because of slowdown.

https://www.team-bhp.com/forum/india...shut-down.html (Delhi: Delight Honda, Hyundai Plaza & Riddhi Ford operated by Mr. Bhatia shut down)

https://www.team-bhp.com/forum/india...20-crores.html (Porsche / Audi dealer Zenica defrauds HDFC Bank of Rs 120 crores)

https://www.team-bhp.com/forum/india...yota-pune.html (Lockdown & strike at DSK Toyota, Pune)

Election Factor
Elections have also played a role in the temporary slowdown alot of perspective buyers are sitting on the fence to see what happens. Also, alot of liquidity gets pumped into the elections.

Analysis of previous data
Lets look at Maruti data as they hold 50% market share. Maruti had the same downturn in April'14 as well, there was a YoY fall of 14% in sales. They sold 79,119 cars in April'14. This recovered the very next month (May'14). Also, If we compare Maruti's numbers from April'14 to April'19 we see a 66% increase in single month sales. And in April'18, the increase more than 100% increase in single month sales. So, there was bound to be some correction and also the above factors weigh as well.

According to me, the situation is being overhyped. But then this is my opinion it might be proven wrong in the coming few months.

[TusharK]

According to a media report, Maruti Suzuki is expecting single digit growth this year and has warned its dealers of tough times ahead.



This year, Maruti is likely to launch a concept Future-S based compact crossover, Brezza petrol, sports variant of the Ertiga and a WagonR-based 7-seater MPV. The new launches are expected to aid growth, which is estimated to be around 5% compared to the previous fiscal.

Last year, Maruti Suzuki had reported a growth of 5%. In April 2019 alone, the carmaker reported a nearly 20% drop in sales despite dealers offering heavy discounts. As a result, Maruti has reportedly cut production by 20% in the last 2 months.

With drop in sales and falling margins, dealerships are struggling to stay afloat. Reports suggest that over 205 dealers and 300 dealer outlets have shut down in the past 2 years. At least 7 Maruti dealers have reportedly shut down last year. As dealers are under increasing financial pressure, Maruti Suzuki is planning to build new showrooms at its own cost and lease them out to dealers.

Source: Money Control

Link to Team-BHP News

[Guite]

Lots of divergent views, makes for very interesting read. On my part I feel cities like Delhi has become over saturated with people and, consequently, cars. It’s a good thing that people are buying less cars. This means less congestion and less pollution. Mass rapid transport infrastructure should be augmented. Delhi Metro is clean, train interval is good, but speed is mostly slow. There is very little difference in time taken between travelling by metro and by car for a 20km commute, unless there is huge jam on the road. If metro train become more attractive then there is less requirement to own a car.

[aniyo]

The worst thing about our industry is that Maruti Suzuki's loss in no one's gain. Ideally if Suzuki is losing growth then someone else should have benefited. Sadly in our country it doesn't happen.
As far as I see, European manufacturers should focus only on the 10-30 Lakhs market and go full on with product launches. Sub-10L category is way too price sensitive for them to adapt to

[SmartCat]

Originally Posted by aniyo

The worst thing about our industry is that Maruti Suzuki's loss in no one's gain. Ideally if Suzuki is losing growth then someone else should have benefited. Sadly in our country it doesn't happen.

Not just our country, it does not happen anywhere. If there is a slowdown in a sector, the market leader is least affected. It is the smaller players who suffer the most.

[rovingeye]

Tata Motors denies reports of sale of Jaguar Land Rover

The UK-based car giant, which was acquired by Tata Motors in 2008 from Ford, has been reeling under tough market conditions and uncertainty over Brexit issue.

Source - https://m.economictimes.com/industry...w/69255878.cms

[Abhejit]

So may not be the best time to post this here. Crux of the matter in last two quoted paras.

Car dealers on taxman’s radar over discounts & freebies to customers

The indirect tax department is scrutinising discounts and freebies offered to customers by major car dealers across the country on suspicion that they may have availed input tax credit on those freebies without paying GST, leading to revenue leakage for the exchequer.

The department has issued preliminary notices to some of the top car dealerships, seeking details of discounts offered by them including freebies, people with direct knowledge of the matter told ET.

Car dealers normally offer discounts and free products to customers when they buy cars. But they are not uniform; dealers tend to offer discounts and freebies depending on their sales.

Now, experts said, dealers have been taking input tax credit on these products, which the taxman thinks shouldn’t be allowed. There is no concept of “free” under GST framework, they said.

[shipnil]

I am not sure if you have come across this article.

https://economictimes.indiatimes.com...w/69247983.cms

The article talks about the slowdown in not only just Auto but other sectors like FMCG and air travel too.

The shadow of a slowdown
An ET Intelligence Group survey had found a few days ago that India's consumption story was seriously misfiring — with many sectors like auto, FMCG and air travel, among others, wallowing in multi-quarter lows.

Roy said that the 10 crore Indian consumers who have so far been powering India's growth story are now beginning to plateau out. He called it an early warning: since 1991 the economy has been driven not by exports but by what these 10 crore consumers wanted to buy.

Even the Ministry of Finance, in its Monthly Economic Report of March 2019, had shed ample light on the current scenario. "India's economy appears to have slowed down slightly in 2018-19. The proximate factors responsible for this slowdown include declining growth of private consumption, tepid increase in fixed investment, and muted exports,"

[Utsav3010]

Originally Posted by mints21

Raj Hyundai is still operational and have their showroom at Malviya Nagar, New Delhi.

Galaxy Toyota is one of the leading Toyota dealer of Delhi and they have just relocated from Kotla Mubarakpur, Defence Colony, New Delhi to Lajpat Nagar Part IV, New Delhi. The reason for relocation was congestion in the area, small size of showroom and lack of proper display space.

I stay in Malviya Nagar itself, and I can vouch that Raj Hyundai has ceased operations. They still have some leftover inventory though, and are delivering cars to customers who had booked their cars earlier. Primary reason for ceasing operation is lack of profits and cut-throat competition. In my earlier post on this very thread, I told how the Maruti Showroom just 3 plots away is always buzzing, while I never saw people at Raj Hyundai. Heck, I wouldn't have recommended this dealership to anybody from my personal experience itself. Their shutdown was sort of inevitable (purely personal views).

As for the Galaxy Toyota, yes, they have relocated to Lajpat Nagar, opposite Jagdish Store and Haldiram's. Galaxy Toyota is one of the biggest dealerships in Delhi NCR and has multiple branches. Even I found it difficult to digest that they shut their showroom in Defence Colony.

[volkman10]

Maruti Suzuki shuts production for a day at Gurgaon, Manesar plants to manage rising inventory levels.


Link

[GTO]

JD's press release covers dealer sentiments:

More than one-fifth (21%) of dealers across the three automotive segments―passenger vehicle, two-wheeler and commercial vehicle―expect their financial performance to be poorer in the recently concluded financial year compared with the previous year, according to the J.D. Power – F A D A 2019 India Dealer Satisfaction with Automotive Manufacturers Index (DSWAMI) StudySM, released today.

The study conducted by J.D. Power, in partnership with the Federation of Automobile Dealers Associations (F A D A) India, finds that among those who expect a poorer performance this year, 71% say that they did not achieve their revenue target for the year. Furthermore, more dealers this year indicate their revenue will be below target (36% this year vs. 33% last year).

“The automotive industry, especially the passenger vehicle and two-wheeler segments, are facing serious headwinds due to several external challenges on the revenue side,” said Kaustav Roy, Director and Country Head, India at J.D. Power. “Additionally, an increase in the cost of doing business have also affected the dealers’ outlook and financial performance. Strategic use of the various business levers, with a strong focus on customer retention, hold the key to long-term sustainability.”

“Dealership business is facing its toughest challenges in recent times and the entire business model needs an overhaul to keep up with the changing dynamics of our trade. This is the first joint survey between J.D. Power and F A D A and we have received a high number of responses from our members. We are hopeful that the findings of the survey will act as a beacon for the entire automotive ecosystem, leading towards a healthier business environment for the Industry, especially for the automotive dealer fraternity at large,” said Ashish Harsharaj Kale, F A D A President.

Following are additional key findings of the 2019 study:

- Digitalization will lead the way: Online purchase of vehicles is seen as an important future trend by almost one-third (31%) of all dealers across the three segments. In addition, 43% of dealers believe that investment in digitalization is likely to bring about a reduction in manpower costs for their business.

- Dealers want more collaboration: One-in-ten (10%) dealers feel that it is not easy to do business with their original equipment manufacturer (OEM). These dealers have satisfaction scores that are, on average, 247 points (on a 1000-point scale) lower than those who find it easy to do business with their OEMs.

- Satisfaction drives loyalty and advocacy: On average, 85% of dealers believe that they “definitely will” continue to work with their automaker for the next two years. Among dealers in the top quartile of satisfaction, 97% expect to be working with the same automaker until at least 2021. In contrast, among dealers who rate their experience with the automaker in the bottom quartile of satisfaction, only 66% expect to be working with the same automaker for the next two years.

Study Rankings

Hyundai ranks highest in the passenger vehicle segment, with a score of 937. Maruti Suzuki (918) ranks second.

TVS ranks highest in the two-wheeler segment, with a score of 800, and Hero (799) ranks second.

In commercial vehicle segment, Tata ranks highest with a score of 773, followed by Eicher (760).

Now in its ninth year, the India DSWAMI Study measures dealer satisfaction with vehicle manufacturers or importers in India and identifies dealer attitudes regarding the automotive retail business. Overall dealer satisfaction is determined by examining nine factors (in order of importance): marketing and sales activities; support from the manufacturer; product; training; sales team; vehicle ordering and delivery; after-sales team; parts and warranty claims.

The 2019 study is based on responses from 2,448 dealer principals or dealership general managers located in more than 200 cities throughout India. The study was conducted in partnership with the Federation of Automobile Dealers Associations (F A D A) and was fielded from January through April 2019.

[pacman2881]

Originally Posted by GTO

JD's press release covers dealer sentiments

Interesting to see Renault ahead of biggies like Ford and Honda and Mahindra. I wonder what makes them tick with limited models / sales. Better management?

Tata at the bottom is worrying considering Tata's recent stride with new launches.