[condor]

GTO : Single brand car dealerships can be unprofitable in small towns

I have seen the same family having multiple dealerships in Class-C cities, though at different locations. If they have managed to get dealerships from competitors, then they could go one step further and have them in the same place.

elfhelm : Even now, there are multi-brand dealerships, atleast I have seen some in Thane, FortPoint Motors is one I think.

Which all makes does this one have ?

elfhelm : For servicing people might still prefer the authorised workshops, I know I would.

I go to my dealer more often than an authorized workshop. If a dealer has multiple brands, I would assume that he services all the brands he carries, and can give me the correct service too. And a dealer makes more money in servicing & the body shop than in selling.

khanak : There was an auto mall comming up at Gurgaon too.

Auto-mall vs Multi-brand car dealership. There is a difference. Which one are we looking at ?

tsk1979 : For example on Mathura road in Delhi, there are dealerships of around 6 biggies within a km from each other, ranging from Porsche to Tata

Guess that happened by default and not by design. And with the other business around that stretch, Mathura Rd does not feel like an Auto-mall. Not like the malls we have seen in US. Then one can truly go car shopping, hopping from one dealership to another one next door.

[ram_hyundai]

in my serious opinion this is going to go kaput.these multi brand dealerships would end up as testdrive facilitators and once the customer has taken test drives and decided on the brand and make which he intends to buy then he would definitely end up looking for the best deals.then the authorised dealers would come into the scene and they would steal the deal with more goodies and after a few months the all car market would plonder on the question of viablity as the over heads would be more.feasiblity of such showroooms atleast in the initial phase would be an issue.
i dont mind travelling 100 kms to save 3000 rs on my deal.i think that would be the attitude of many indians for the time being.
ram

[khanak]

Originally Posted by ram_hyundai

in my serious opinion this is going to go kaput.these multi brand dealerships would end up as testdrive facilitators and once the customer has taken test drives and decided on the brand and make which he intends to buy then he would definitely end up looking for the best deals.then the authorised dealers would come into the scene and they would steal the deal with more goodies and after a few months the all car market would plonder on the question of viablity as the over heads would be more.feasiblity of such showroooms atleast in the initial phase would be an issue.
i dont mind travelling 100 kms to save 3000 rs on my deal.i think that would be the attitude of many indians for the time being.
ram

Very True. Infact it makes you wonder if low cost dealerships with hardly any facilities would be successful. Imagine a dealership where cars are priceds 10-20k below dealership prices. One which doesnt have a showroom in a fancy area or a showroom at all and instead operates out of a small office. Im sure putting in the cost of rent (which is sky high in places like Mumbai), sales commissions(are they really that helpful), employee salaries and electricity. Id say they would be able to save quite a bit.
IMO once I decide on what car I want I would rather get the discount than the service to be really honest.

Turning my whole argument around I think this is where multicar showrooms will prosper if they are able to use economies of scale to price their cars lower than or at the very minimum at par with other dealerships.

[GTO]

Originally Posted by VBV

To illustrate this, today I have a Maruti car, and I have a great service guy looking after the car. But if I want to buy a Toyota tomorrow, I am going to lose out on that. With this, I am going to get continuity in service.

VBV

Well said, a pro and con to each situation. But would you not agree that a techie who works on the same brand of cars will be far more qualified for that particular brand, versus someone who works on a multitude of brands every day?

Originally Posted by bblost

actually one of the best ways to test out many cars is to go to a second hand dealer and checking them all out.
Not only do you get to drive different cars under one roof, but you also get to see how the car will age.

Smart, especially the "how the car will age" part. Am copying your post to the "How to buy a used car" article.

[madan80]

well... i guess Mr. Khattar is looking at it from the companies perspective. like the article pointed out, with a mere 3% margin vis-a-vis 7% in most countries, there is a high churn on dealerships. What he is doing is putting together a multicar delearship from the mfgs end. So, they dont worry about dealer churn. They will still work with the same targets and stuff.

IMHO i think it will work.

[VBV]

Originally Posted by GTO

Well said, a pro and con to each situation. But would you not agree that a techie who works on the same brand of cars will be far more qualified for that particular brand, versus someone who works on a multitude of brands every day?

Yes and no.

Yes, to a dedicated and continued technician.

But, in the service age that we are in today, here's how the service center I go to works:
- A service manager/customer rep to take care of customers.
- A technical person to take care of repairs
- Replace instead of repair seems to be the new mantra (so deep knowledge does not appear to be a necessity)
- Technicians are new and keep moving from place to place.

In this context, what I need is the assurance that due diligence is done. That assurance is based on the trust I have on the service manager. So I really don't mind a shift in technician when I can have a dedicated service person.

VBV

[Mpower]

Originally Posted by GTO

The primary difference between this, and the existing examples, is the "authorised" tag. Plus, Khattar intends to create a nationwide chain of his multi-brand dealerships.

Even if Khattar wants to, the automakers have to co-operate with him to make it work. In the US, there are multibrand dealerships but only when the 2 brands are not directly competing with each other. Like for example, a Suzuki and an Oldsmobile. I have never seen a Honda+Toyota dealer or a Ford+Chevy dealer. Another issue is that the OEM has a specific layout for the dealership must adhere to down to the color of the sofa in the waiting room.

But in the US, there are what is called auto malls where 8-10 dealers are in the same road next to each other. This, in a way helps out the customer.

[Swaroop77]

Smart move by Mr Khattar. He will get the dealer commission no matter which car sells. If you get a customer into the door looking to buy a car, then the deal gonna be made no matter what the brand/make. Needless to say, both the end customer as well as Mr Khattar's company will gain. The end customer might get a better price as compared to single brand dealership ( economies of volume, better bargaining clout a la big retailers etc). I would prefer getting my car serviced at company's dealership ( depends on how much focus would a multi brand showroom put on servicing).

[kryptik83]

Originally Posted by khanak

There was an auto mall comming up at Gurgaon too.

That sounds like music to my ears, visiting the auto mall whenever you are down due to your daily chores

[svsantosh]

Source - Times of India - Blore- 6-May-08, (EPaper)
-----------------------------------------------

Multi-brand car mall coming to Bangalore

Mini Joseph Tejaswi & Anshul Dhamija | TNN

Bangalore: Yes, a one-stopshop to buy your dream car. The city will soon sport the country’s first shopping mall exclusively dedicated to cars of all brands right from a Maruti 800 to a Ferrari. Leading auto dealers in the city are coming together to set up this multi-brand car mall to be spread over 50-acres near the new Bengaluru International Airport. While the planning and conceptual stages of the project are under way, a special
purpose vehicle is being commissioned, which would fund the project. The project is expected to cost over Rs 100 crore.
In addition to having all car brands under one roof, the mall will feature an expansive testing circuit, where buyers would be allowed to test cars of their choice. Interestingly, the mall will feature driving schools, single-window counters to avail of driving licence, new car registration counters and financing outlets. Like any other retail malls, this mall too will provide a complete family experience, comprising various entertainment activities for children, food courts, shopping arcades (car accessories) and in all probability a multiplex.
“The idea is to create a onestop-shop for customers. Customers can go to the car mall and buy what they want in a day instead of running through multiple dealers,’’ said industry sources. And aren’t customers waiting eagerly?. “We wanted to take a look at small cars of every brand before we decided to buy one. Going from one dealer to the other was truly painful and time consuming. Eventually it took almost a week for us to decide on a car, which was mutually agreeable
between my wife, son and I,” says Kiran Sridhar, a tech professional.
Retail biggies like Reliance are already known to have put in thought to a similar idea. According to sources, Mukesh Ambani’s Reliance Retail is planning a similar multibrand mall format for twowheelers that would come up at its Hypermarkets.
Luxury car manufacturers like Rolls Royce and BMW have already taken the mall retail route, while some of the mid-segment players like Maruti Suzuki and Toyota are also known to be toying with retail plans.

ALL IN ONE

All car brands under one roof
Mall to have food courts, entertainment spaces
To sport a test-drive circuit Auto industry puts expats in driver’s seat

[k.sabarigirish]

Originally Posted by GTO

The primary difference between this, and the existing examples, is the "authorised" tag. Plus, Khattar intends to create a nationwide chain of his multi-brand dealerships.

surely going to help the customers.

[simplyself]

It could be good idea but there are a lot of ifs and buts.

By the way, how is the Tata - Fiat combine doing?

[barcode]

There were a few "stores" like these that cropped up recently in Delhi. But they are far from being called successes.

Infact some of the Bank's DSAs have done a far better job. The bigger ones have evolved to MBOs!

[GTO]

No kidding, indeed DSA's have tasted better success in selling multiple brands of cars. I do feel its a golden opportunity, but one that needs an innovative business model to succeed. Lets see how the supposed big players fare in the next 3 - 4 years.

[muralisk]

Hi friends,

I read in Business-Standard about a new company floated by Jagdish Khattar, former managing director of Maruti Suzuki India who has recently turned entrepreneur. Khattar, who floated Carnation Auto, has planned an investment of Rs 1,000 crore in the next five years to launch a countrywide multi-brand automobile sales and service network.

“By the end of this financial year, we will be launching at least half-a-dozen auto solution hubs in the National Capital Region, Hyderabad and Cochin. In the next financial year, we plan to launch 25 to 30 such hubs across India,” Khattar, who is chairman and managing director of Carnation Auto, said.

My question is, what is viability of such companies and are there any such shops in the developed markets.