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-   -   FADA tells SIAM to calculate market share on the basis of actual car registrations (https://www.team-bhp.com/forum/indian-car-scene/213173-fada-tells-siam-calculate-market-share-basis-actual-car-registrations.html)

Federation of Automobile Dealers Associations (FADA) has written to the Society of Indian Automobile Manufacturers (SIAM) to ask OEMs to calculate market share on the basis of actual vehicle registrations found in the Vahan platform.



In his letter to SIAM, FADA President Mr. Ashish Harsharaj Kale has requested the auto industry to shift to the new system, which is also the norm followed elsewhere in the world.

It is said that it would have been easier to predict the slowdown, which the auto sector is currently facing, if retail numbers had been reported instead of factory dispatches.

Link to Team-BHP News

I completely agree. Retail sales should be considered for evaluating sales performance of auto manufacturers.

A very welcome move indeed. Was wondering when this would happen. I think those manufacturers who have more number of dealers always have more number of cars dispatched. This happens at least during initial few months after the launch of a new car. Demo cars,media cars and test drive cars make up the bulk of volume.

Take for example the New Civic, whose dispatches stood at around 2200 units in the first month and now have settled around 200 units. Also Maruti is known to stuff its dealers stockyards with extra vehicles. And Maruti having the highest number of dealers for any manufacturer in India always gives a large number of corresponding car dispatches.

So now we will get a true idea "kaun kitne paani me hai" stupid:

Makes immense sense. The fact is that the August decline in car sales is grossly overstated as a large part is inventory correction - aimed at getting inventory of BS4 cars to zero by March 31.

About time too.
The market share calculation by Indian OEM's was always a deeply flawed one, giving a skewed perspective to what was being actually bought by customers.
In fact years ago, a group of influential dealers had requested OEM's to publish retail figures & if they couldn't or wouldn't, at least to publish two sets of figures : one wholesale and one retail.
OEM' s & SIAM dragged their feet: the most common excuse being cited was that all RTO's in the country were not synced in entirety, hence getting all state vehicle registration data will be a time consuming, prone to error exercise etc.

Now with the VAHAN software being used by almost all RTO's, the state-wise actual vehicle registration is easily available and it should not be a problem sharing these actual figures with the authorities and trade representative bodies.

Best thing will be, that potential customers can now actually know the real world sales performance of the models they are thinking of purchasing & come to a better and more informed decision.

The old adage, " Joh deekta hain, wohi beekta hain", (loosely translated: "What you actually see on the road, sells the most"), might just come true!

:thumbs up to the FADA!

It is basically telling the car manufacturers not to "game the system". Manufacturers frequently stuff dealer channels to artificially inflate sales numbers and meet their internal targets. Publicly listed companies like Maruti, Mahindra & Tata even engage in this to please the stock market. It's a ridiculous practice! The end customer is the only one whose transaction should be counted. Now, with car registrations going online and vehicle data easily available, there is no reason not to.

Don't expect the lame, useless, complacent & good-for-nothing SIAM to easily comply with this though. The sole purpose of the SIAM is to go begging to the government for sops, subsidies & tax cuts (luckily, the SIAM is on the Finance Minister's do-not-disturb list rl:). The 2nd job of the SIAM is to keep fighting any new pro-citizen initiatives of the government (e.g. BS6, making airbags & ABS mandatory).

I was so foolish to think those were the actual numbers sold. I mean that's what any governing body would be interested in right ? The actual performance of the OEM's.

Anyways this is good news for everyone except for Maruti I guess.

For Maruti, Say an inventory of say 10 cars multiplied with 2000 dealers will be 20000 vehicles in a month

Aug data : ( https://www.team-bhp.com/news/august...bath-continues )

So the revised numbers ( 75000 of 195000 ) will bring down the market share 47 % to 37 % ?? :Shockked: OMG the markets are not going to be happy !!

Please correct me If I missed something with the calculations

195000 figure too will come down when all manufacturers report the retail numbers.

Good Move,

But the one negative is that the Sales guy in the Showroom trying to meet a monthly target to meet the Showrooms monthly target to meet the company's monthly target would have a disconnect as registration would take about 3-4 days or so from the date of sale from the showroom.

But this will indeed prevent gaming the system. True figures coming our way.

Correct, I missed that point. But considering that Maruti manufactures the most and maintains high Inventory, I guess they will suffer the highest decline among all.

Over all, good move if adopted to get a real picture of the industry's performance !

Could happen initially. Over time it could catch up with right numbers. Now wouldn't the RTOs be able to publish this ? Since everything is supposed to be connected and available, it should be easier.

The is the most appropriate time to move to Retail numbers. One of the reasons for the current downturn is oversupply from the OEMs in the last 1 year or so, just to report higher numbers. Now they are doing inventory correction to manage BS-IV stock and fooling everyone around. It was okay to report wholesales since our retail systems were not automated and centralised. Now with everything getting online, we need to do some coarse correction in reporting.

Besides the inventory and reporting thing, this will also make the sales staff at OEMs a bit more accountable. They will also have to focus on actual sales than just pushing the dealer to buy more. Banks will also benefit as they will not have to fund unnecessary inventory. As someone rightly said, i don't expect SIAM to accept this easily. With wholesales, they can manipulate a lot of things but Retails will paint a different picture.

Low volumes indicated by actual registrations will open Pandora box. Governments (present and past) have been using auto sales numbers to project robust economic growth. If the numbers are suddenly revised down by say 20% for the industry, the begging bowl of SIAM will start looking realistic.

So a catch 22 situation for government and no action looks best outcome for them.

The members of SIAM have done an absolutely fantastic job in creating one of the best and the most competitive automotive market in the world, in one of the most difficult one. No doubt, they will have self interest paramount as is to be expected of anyone in a free market, just as you would expect FADA to be.

To be sure, as a consumer, it is well established that dealers, as a whole, are a horrible lot to deal with, in comparison with manufacturers.

As for end market share, I know of no industry where the players share retail market-share data monthly, in India or say the US(a market that I read about). In fact monthly shipment data too is not available in the US. I would not want to share such data if I were an auto manufacturer, even as I would like to know others’ share. Further FADA also has access to VAHAN data and they have been issuing atleast 2W registrations for some time (not sure about 4W), with a lag though. That’s good enough to give indication if there’s a slowdown.

In conclusion, a no-holds-barred bashing of SIAM seems unreasonable.