While overall satisfaction improves, only 42% of dealers estimate they will be profitable in FY 2013-2014. In this regard, 31% of dealerships based 6 of India’s largest cities expect to make a profit this year. with dealers relying on sales-related proceeds from new-car sales, accessories, insurance and credit/ loans commissions for about half of their revenues, since overall vehicle sales are down 6% from 2013, many dealerships estimate losses in 2014.
“Given the relatively weak outlook on vehicle sales, dealerships are concerned about the viability of their business,” said Mohit Arora, executive director of J.D. Power Asia Pacific.
Increased service revenue share helps dealers stay afloat in tough times but retaining customers beyond the standard warranty period has always been a challenge for Indian dealerships. As sales revenues are compacted, focus on service business is essential in order to be viable and sustainable.
The study in its 4th year measures dealer satisfaction with vehicle manufacturers or importers in India and is pinpointing dealer attitudes in regards to automotive retail business. Overall dealer satisfaction is determined by examining 9 factors: marketing and sales activities; product; vehicle ordering and delivery; sales team; parts; warranty claims; after-sales team; training; and support from the manufacturer. Overall dealer satisfaction with automotive manufacturers averages 827 points on a 1,000-point scale in 2014, up from 817 points in 2013. Satisfaction has improved over 8 of 9 factors, most notably in parts, after-sales team and warranty claims.