Dear Friends,

Post the Festive Season, which created a big dent in Auto Sales, we were hopeful for a Sales Revival as Fuel Prices continued its downward journey. Due to high inventory levels, year-end discounting was at a new high. This was the best time for any customer to buy his favorite vehicle. Apart from the favorable prices with high discounting and many giveaways and enquiry levels being above the red mark, the sales were not as per expectation. This is a worrying moment for the Dealers and for OEMs.

It is a well-known fact that the current inventory levels at Dealerships, even Post-Festive Season are Very High as 2W Inventory stand at 50-60 days, PV inventory stands in between 40-45 days. Inventory levels in CV, although not at alarming levels, are still not in the desired range.

I am thankful to all the OEMs that they have taken note of the stock situation as many of their recent press statements reflect the same. F A D A is appreciative of the efforts taken by the PV OEM’s, majority of whom have taken conscious steps towards reducing Dealer Inventory and look forward to the same continuing till we are at 30 days Inventory.

Similar Efforts were not visible as being taken by the 2W OEM’s and F A D A would once again appeal to the 2W OEM’s to take Note of the Huge Inventory and Take Urgent Corrective Measures towards reduction to normal levels.

The entire Auto Retail Eco-system of OEM, Financier and Dealers now recognize this to be a pain point and I am hopeful that stock correction will be brought to check immediately as it is becoming unviable for dealers to maintain such high levels of inventory with every passing day. This is also creating an excess demand for working capital, which, with the current NBFC Liquidity Crises and the high cost of operations of dealerships is a big hinderance in running one’s dealership efficiently.

To take a stock of the situation of NBFC Liquidity issue, SIAM which is the association of all OEM’s, called for a joint meeting with General Insurance Corporation of India (GIC), Finance Industry Development Council (FIDC) and F A D A. The discussions were around the current NBFCs liquidity crisis and insurance trends. F A D A took up the matter very strongly and deliberated on how the current liquidity crisis and insurance flip flops are hurting the Auto Sales. It was decided that a Joint Representation will be given to Ministry of Finance post which a small delegation will even meet the Honorable Finance Minister and appraise him about the current situation and seek solutions. While I write, F A D A and SIAMs view has already been shared with FIDC for preparing this Joint Representation.

Continuing with our work at F A D A, the F A D A Awards powered by Autocar Professional is scheduled to be held sometimes in the month of August 2019. For the first time, F A D A has engaged Ernst and Young (EY) as its Evaluation Partner. EY is already evaluating 70 Awards of Varied Business and Entertainment industry and bring with them a Treasure Trove of Experience in Evaluation. This will make the Entire Award process more accurate and sharper.

Every year JD Power with support from FADA, brings out its Dealer Satisfaction Study (DSWAMI) where Dealers rate their OEM on different Parameters. Mr. Shantanu Nandi Majumdar, Regional Director – Automotive Practice visited us from Singapore to discuss the Survey with us. I am happy to share that JD Power has incorporated all our inputs and beginning this year the survey will be released jointly as the “JD Power – F A D A Dealer Satisfaction Study”.

We will seek your support in ensuring maximum participation of our members in answering the survey so that a complete feedback is received across all the verticals and geographies. 

To continue our interactions with the Government, we invited Mr. Abhay Damle, Jt. Secretary, MoRTH and discussed on how the Ministry and F A D A can join hands on various issues and specially Road Safety. I am happy to share that as first yet significant step, we have released Road Safety Sticker co-branded by MoRTH and F A D A at our latest event Vyapar Gujarat and also released a co-branded safety video message on New Year’s Eve to prevent drunk driving. 2019 will be the year that F A D A will focus on many activities on Road Safety and I shall share more activities with all of you as and when they happen and will seek your co-operation in ensuring wide spread to our messages.

We recently attended CII- ASCON meeting. CII as a body has created an Associations Council which meets every quarter and discusses how each industry is performing. The Committee is chaired by CII Vice President and SIAM Past President Mr. Vikram S Kirloskar. F A D A put across the issues which the dealer community is currently grappling with. The points were well taken and the same has also been put across relevant ministries. 

Continuing with the Vyapar Series of events, Vyapar Gujarat was held on 20th December in Ahmedabad along with 290th Council Meeting of the Federation. I am happy to share that with every Vyapar, the number of registered delegates has been increasing. This time, Vyapar Gujarat touched a total footfall of ~200 delegates who visited from every part of the State. I am sure that Dealers are finding a lot of value in such events where on one hand we discuss State Related Issues and on the other hand, Best Practices and Motivational Sessions are being held. Events like these helps the dealers connect with each other and also give them a sense of where the industry is moving towards.

To continue our march ahead, Vyapar Karnataka is being organized on 8th Feb’19 at Radisson Blu Atria in Bengaluru. I am sure that dealer friends from within the state will be eager to attend this first F A D A event in the state. As usual, the team is preparing a rich content which am sure will keep all of us excited and make us leave the event motivated. More details will be circulated well in advance.

A New Year brings with it many Opportunities and as we end the year, it’s time to reflect on the Hits and Misses and prepare ourselves for the Challenges our Business Faces as well as encash the many Opportunities that the New Year brings along.

Wishing all of you a Very Happy New Year.

Warm regards,

Ashish Harsharaj Kale

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