Link to Related Thread - A salesman's life in a car dealership
First post on TeamBHP
About me
I am Tarbrinder Singh and I am so happy that my membership finally got approved today after 7 unsuccessful efforts in the past 9 years. Just like all of you I live and breathe auto-motives. I left a handsome IT job to pursue my passion for this Industry and ultimately ended up being placed in an OEM supplier after my MBA from IMT. Due to COVID, my joining was deferred until the next year. Since I was getting bored at home, I had the experience of working at Tata Motors car dealership in Amritsar(my hometown). Even though it was just for a few weeks, I can now pen down my experience and share what happens behind the scenes of a car purchase. This will help the community understand nuisances of on-road pricing and what all happens in a dealership.
Excuse my grammar mistakes if any and feel free to ask anything that you want to be clarified.
How I ended up working for a dealerhip
One fine day when I was looking for an Internship on LinkedIn, I came across an opening for a salesman at a Tata Motors dealership. I called at the dealership’s phone number and was asked to come with a resume the very next day. Once I was there, my resume was forwarded to HR of the Novelty group. This family is handling a number of car dealerships in my city including Ford, Hyundai, Mahindra, etc. Just some casual questions were asked about the automobile industry and why I wanted to work. Even though I had researched about the salary paid to a typical salesman, I was shocked to find out that max they could offer me as a fixed component was 10k. Later I learned that even the best of their employees are paid 12-15k and rest 5-6k as incentives based on sales targets, which I will explain later. Anyways, I was offered the job and asked to join the next day.
The Team
You can consider the team across a typical car dealership pretty much the same as mentioned below.
Let's start with
Salesmen. These people are the ones who directly deal with customers. For dealerships like Maruti, Tata, Mahindra, etc, the salesmen are not that educated. Even though few had done graduation but as such don't consider them highly educated. Most of them are graduated just for namesake or completed their 12th and immediately started working. Prior to their jobs at the dealership, either they were doing nothing or field sales(FMCG/ Personal care products sales to Kirana stores, etc).
These people keep switching between dealerships even if they are offered a couple of thousands more because the dealership owners normally don't*increase salaries.
Their knowledge about cars is limited to features and price and they can exactly tell what feature is there in which car and which variant. The selling skills of those who are experienced are commendable. They will close the deal even before you have made your mind.
Next is
Team Lead. This person is the one who is experienced the most. He is actually paid 2-3 times more than a typical salesman. He has lot of contacts with used car dealerships, salesmen from other dealerships, workshops, etc to pull the right triggers when required. If you have ever gone for a car purchase, the senior guy your salesman brought for final discussion was most probably a Team Lead.
As I will discuss later on, the final discounts are in his hand and this person knows what is the last that can be offered.
GM. For every dealership, there is GM who handles orders and billing of products among other important things. This person might not be that good at selling but has good command over the team, keeps records of orders, bookings, billings, incentives, etc. Test Drive vouchers, Accessories/Gate Pass, bills, Petrol filling vouchers everything is signed by this person. He/she is the one who actually operates the dealerships and clears all the paperwork. This person is paid as much as a Team Lead.
Preowned Vehicle Expert
This person takes care of cars that come in for exchange and has the best knowledge of mechanics, variants, etc in the entire team. He has contacts with many used car dealerships and even customers who are interested in buying used cars. He collaborates directly with salesmen to provide the final price of the car so that the discounts, exchange bonuses, etc can be adjusted to give customers the impression that the best deal is being provided to them for their old car. Sometimes this person also buys a car on his risk, does necessary mechanical work on the car, and then sells it or moves it to other used car local dealership with help of TL.
Loan/Finance Expert
This person has contacts with banks, is aware of the current month's finance schemes, and generally sees if the particular case is not a defaulter case. If the file is good and the customer is genuine, this person can also pull some hooks to get the loans passed. He keeps in touch with customers until the payment is disbursed by the bank and sometimes personally visits the banks or customers to get approval for the loan. What I have learned while working at Tata motors dealership is that the customer with rural profile prefers Tata motors and these are the ones who face difficulty with loans with other brand's dealerships but not with Tata. TATA's inhouse financer, is little lenient on loan requirements and often it happens that one can get a loan of higher amount but at a bit higher interest rate from Tata Dealership. The loan expert plays a vital role in finalizing the deal.
Back office Team. This team prepares and updates excel sheets for GMs decision making. They also update customer enquires for salesmen and update their followups as and when required in SalesCRM. The receptionist is also part of this team and helps maintain all the customer data and makes sure that the data is maintained and every customer fills the inquiry register before a salesman is allotted to them. All the IVR Calls are diverted by these people to their favorite salesman or TL who further gives the lead to his favorite if the customer is hot.
Accountant. A team of 1-2 people manages all the money related matters and report directly to GM in matters related to receipts, cash, etc.
A dealership mechanic. He fits accessories, keeps the cars clean and polished, charges them using jump-start cables every morning, fills petrol/diesel every morning, and so on. He is also the one who prepares the cars for delivery. Every morning he is the first one to start working because he has to keep each car running for a few minutes before the customers start walking in. He is the one who loads unloads the cars from the trucks and parks them at the stockyard. He is also the one who takes cars to a dealership for washing etc. He also fits numberplates for new cars delivered. In my opinion the most hard-working guy in the entire dealership.
A
Security guard at the warehouse keeps a check on cars that go for a test drive and notes down the number of KMs driven and any damage incurred during the test drive. If a salesman wants to show a particular color or variant to a customer for a car which is in the warehouse, this security guard has all the keys and all we have to do is tell him the chassis number and he will give you the key. You can’t take the vehicle out but can just check it inside out and move for few meters to check vibrations etc.
Cleaning Staff. These people keep dealership premises clean and also arrange tea/water for customers and employees when required.
Working hours and work policy
The whole team usually works b/w 10 am-7 pm with Sundays off or rotational shifts on Sundays and depending upon the policy they are either paid for working on Sundays or provided one extra leave that can be taken in next week. There is a strict on-time policy and the salary is deducted if you are ill or take leave for any personal reasons. Formals are necessary for the team except for GM and TL.
A typical day at a dealership for a salesman Team Meeting
Most of the salesmen including team leads and GM arrive on time. After the initial round of gossip, at around 10:30 team meetings happen. Team Lead and GM cross-check how many bookings have been taken by each salesman for the previous day and for that particular month as a whole. Updates are given on on cars that are billed by OEM, which are in transit, and possible days of their arrival so that the loan process for these customers could be initiated. The team is also made aware of any new cars that are in stock so that customers can be molded to those variants or colors if possible.
Everyday extra stress is given on selling cars that are in stock or have the least waiting period. Given the competition for cars like Altroz Tiago etc consider your booking lost if the particular variant that customer finalizes has a long waiting period. Salesmen are asked every morning to mold customers to variants and colors in stock.
Team Lead also checks the status of all inquiries that happened the previous day and see if something specific needs to be done for some particular customer that visited the previous day or any problem faced by any person in the team. He also personally revisits the cases of the previous day that require his attention like a test drive to the faraway location if the customer is hot, or personally attending to a loan file for special cases or pushing the extra mile to provide a better deal for a used car.
Followups and remote testdrives
During the team meeting only, back-office staff provides a follow-up list to each salesman so that they can call the customers who they have attended in the past and follow up on the same. What happens here is that most of these inquiries are redundant and salespeople consider follow-ups as a boring task so often they punch fake followups or just ignore these lists and only call those people who they think are really hot customers.
A weak CRM team means you won't get a callback for your query on the Tata Motor's website or dealership website or any blog site like cardekho, carwale etc.
Till lunchtime there are not many showroom walk-in customers hence salesmen try to finish this followup task and take the test-drive vehicles to customer location to finalize deals. Salesmen only give a test drive to those who are super serious and there is a high probability that they will book the vehicle once they take the test drive vehicle at their home or office location.
Arrival of customer
Once a customer walks in, receptionist notes down their name and phone number and name of a salesman who is attending that very customer so that inquiries can be punched later on in their name in SalesCRM.
Attending a customer
More or less everyone is aware of this but interesting thing is, teenagers are avoided, for high chances are they have come just to look at some newly launched vehicle and generally are not decision-makers for the purchase. They will waste time, and an unnecessary query would be punched in the salesman's name. People who look at multiple cars are also not given much attention since they come only for time pass, so generally, a rate list with on-road prices is handed over to them and not much effort is made in explaining the features.
But as soon as someone with a family or aged person walks in, salesmen run towards the gate to attend them. They often fight with each other to decide who will take the customer. Since Tata as a brand is still not that popular, good customers are hard to come by, and to complete your targets and gain incentives, salespeople are really serious about picking the right set of customers and waste the least amount of their time and energy with wrong customers.
After the demo of the vehicle to the customer, if it seems that customer is genuine, a test drive is arranged otherwise some or other excuse is made like the vehicle is not in running condition or there is no gas in the vehicle or it is going somewhere else and so on.
Quotation
Pricing is the most important part of salesman dealing. Initially, a lump sum on-road price is given to the customer and if customers are interested and seem genuine these tactics are used to give the final price.
Everyone has a different style of selling.
One can give you all the discounts at once in one go
Someone else will provide just 5-10k discount and leave rest when customer actually comes with booking amount
Someone will just increase 20-30k in overall on-road price and provide that inflated price as a discount and give additional offers above that.
Some just leave little margin so that they can pretend to go to some senior person and then bring additional discount which actually was in their hand only just as to show that extra efforts were made to make that deal
Still, there is always a margin of 20-40k above the actual dealership margin behind a car which can be adjusted during final purchase. From where this margin comes I am explaining next.
Behind the scenes of road pricing
Consider the following pricing
Tiago XT
Exshowroom Price 520000
Insurance 25147
RC Charges 48279
Cow cess 1000
Numberplate charges 1200
Handling charges 8500
Accessories 15000
On-road 619126
Actual Prices
Even though I was never made aware of actual documents supporting these prices….this is what I found by myself.
Tiago XT was billed at 490000 to the dealership. Rest 30k is a margin of the dealership, which the sales team is not allowed to touch in 90% of cases. So 520000 cant be touched in most of the cases
Insurance for Tiago XT including DepCap from Tata AIG can be bought online for 18k on policy bazaar so 7k here is probably the additional dealership margin
At 9% in Punjab, Road tax charges on price excluding 28% GST of ex-showroom comes to around 36000, Registration charges of 600 and additional 1500 if it is a financed vehicle, number plate charges of 300-400, and temporary reg charges of 1200-1500. Max amount comes to around 4000.
So including everything, the RC charges should be 40k whereas the customer is quoted 48k. Additional money directly goes to the dealership's pocket or leveraged as a discount if required.
Discounts and inflated margins
Handling charges are waived off as a discount
Accessories are waived off as discount. These include perfume, doormats, and mud flaps which cost not more than 3k combined.
Wax coating is provided as a free option
15-25L petrol diesel can be easily negotiated
So basically in On-road of 619126 without including actual consumer benefits from OEM, the dealership still can give a discount of 15000(Accessories)+8500(HandlIng charges)+1200(Number plate charges)+600(Fast tag charges)+7000(inflated insurance)+8000(Inflated RC charges)= Total of 40k+ discounts are possible if you really bargain to the last possibility.
Out of this 40 k …15000+8500 is in hands of salesman, for rest of negotiation you really need to press team lead and GM because they won't nudge. Even they have strict orders from the dealership owners to get everything out of customers' pockets before negotiating on these bits.
Consumer benefits and exchange bonus hacks
Additional consumer discounts like the corporate offer, exchange bonus, consumer offer, etc are applicable extra.
Even in exchange bonuses, without selling your car, with the help of dealership, you can show any RC and punch it as exchanged during billing to get that additional discount. It really is the last thing possible to make the deal possible.
Dealerships often provide maximum discounts on cars that are standing in the showroom or stockyard or not moving from the past couple of months. If the team gets the hint that the customer really wants a particular variant and has no other choice even from some other brand then it is all up to the mood of TL or GM and your negotiation skills for that final offer.
Incentive structure
Each salesman has a target. One who performs betters has a higher target and higher incentives and one who is new or favorite of TL or GM has lower targets and fewer incentives. In some months even the OEM provides incentives to dealership for example 5k each for 5 harriers sold in one month which either the dealership owner can choose to keep with himself or forward it to the respective salesman who sold them.
Financer has his own targets, Preowned vehicle expert has his own targets, GM and Team Lead have overall targets, and so on. For Salespeople, it is an average of 5-8k extra and can only be availed once the monthly target is achieved. Sometimes there is a provision to give 30% and so on if 50% of the target is achieved or nothing even if only one less car is sold than the monthly target. All depends upon how GM and dealership owner decides the incentive structure.
The salesmen who achieve their targets often loans their additional bookings or deliveries to their fellow teammates so that next month or whenever they fall short of their own targets they can ask these very teammates to return favour.
Other points
No matter who books or delivers the vehicle, one who happened to meet the customer first and punched the inquiry on sales CRM, owns that booking/delivery in his target numbers.
Salespeople avoid giving a breakdown of the on-road cost. Since they can be questioned or they lose their negotiating power if the customer is educated, so generally a lump sum on-road and discounts are jolted down on the rough sheet.
Some dealerships give discounts from their own margins. They often manage to match and even better the deal than the other dealership. GMs often fight over these territory issues when a call with ASMs/Territory Managers happen
Wax coating is also given as freebie which actually cost nothing to a dealership but just sounds good
Often Trip meter fuses are unplugged from brand new vehicles to give test drive to hot customers and plugged again after the test drive is done. Responsibility of such test drive lies with the salesman and he is penalized if anything goes wrong with a brand new vehicle.
Let's say you forgot to unplug the fuse, Tata motors give provision to reset the trip meter 2 times in vehicles' entire lifetime. Each time vehicle has to run under 100 km. So max a meter that can be pushed back is 200KM.
Often Salesmen put fake test drives to go out and do their personal work in showroom’s test drive vehicles. Fake locations and fake customers are punched in sales CRM
Many dealership owners delay incentives till festival season, so often salesmen have less motivation to complete their targets
Chances are, your brand new vehicle got some cut/bruises/paint-peel-off while loading/unloading. Dealerships do PDI and make necessary repairs before the vehicle is delivered.
I have seen customers send multiple families in the same dealership to pitch one salesman’s quotation against another person’s quotation and squeeze that last bit of discount.
Some customers even get car covers as a free accessory. Get door handles and ORVMS body colored for base variants as part of the deal.
Even better if you know the dealership owner. TL will give you the best possible price immediately.
Pre-owned cars expert always try to include all the possible discounts with the old car’s price so that customer feels good about selling his old car at price higher than market price.
I think I have almost covered everything that comes to my mind and things that I noticed while I was there. Overall it was one hell of experience to work and learn so much about sales in such a short duration. At Maruti and Hyundai competition is internal but at dealerships like Tata Mahindra Skoda etc you really need to know competition inside out. Salespeople here really know how to pitch there products.
Tata is earning the image of safe car manufacturer. 3 cylinder engines are still looked upon as shortcoming but then everyone who visit Tata, appreciated their build quality, highway manners and overall ruggedness. Having star product like Harrier also helps sale for smaller cars and has definitely upped the game for Tata. I have seen all salespeople pitch in NCAP, JLR, DESION 2.0 etc to woo customers and it is working. CRM and workshop exp still needs to improve a lot but then Tata is picking the pace slowly. Even due to Covid there is good number of customers that visit the showroom in Tier2 city like Amritsar.
24th August 2020, 18:39
(259)
Thanks
when incentives have been paid. 
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