Mumbai, Monday, 16th September 2024: Federation of Automobile Dealers Associations (FADA), the apex national body of Automobile Retail in India today announced the outcome of Dealer Satisfaction Study 2024 results which was undertaken in association with PremonAsia, a consumer-insight led consulting & advisory firm based out of Singapore.
Commenting on the release of the study, FADA President, Mr. C S Vigneshwar said, “I extend my sincere gratitude to the over 1,500 Dealer Principals, representing nearly 4,500 outlets across India, who contributed to this year’s DSS study. Their invaluable feedback underscores the continued need for deeper collaboration between OEMs and Dealers to address key areas of concern. The 2024 findings highlight critical areas for improvement, particularly in the support for buy-back policies on unsold spare parts and the implementation of more dealer-friendly inventory management norms for new vehicles—both of which are essential to ensuring the financial stability of dealerships.
Despite these challenges, Dealers have expressed strong satisfaction with the reliability and diversity of OEM products, which continue to serve as key strengths in the Dealer-OEM relationship.”
PremonAsia Director and COO, Mr. Rahul Sharma said, “The Dealers continue to assign higher importance to After-sales and Business Viability related issues. While there have been improvements made by OEMs in all the areas, the expectations on ensuring Dealer viability, particularly related to OEMs buyback / deadstock inventory and understanding the dealer cost structure are still flagged as concern areas across the industry. Addressing these concerns through involving dealers in the policy making and hearing them will certainly go a long way in managing dealer expectations better.”
Key Highlights:
- 4-Wheeler mass market: JSW MG Motor emerges as the top performer with an industry-leading score of 866 points – the highest across segments.
- 2-Wheeler mass market: Honda Motorcycle & Scooter India (HMSI) leads with 805 index points, maintaining its position as the only brand to have consistently held the number one spot since the survey’s inception 4 years back.
- Commercial Vehicles: Ashok Leyland has surpassed its previous performance to achieve the top rank with 817 index points, while Bharat Benz makes its debut in the top three.
- Most significant improvement: Tata Motors PV has improved its last year performance by 98 points in this year’s study to end at number 4 in the 4-Wheeler Mass segment.
- In the 2-Wheeler Mass market segment, TVS Motor has secured the joint third position, improving its performance by 37 index points from last year.
- Bharat Benz has made its debut in the top three of the CV segments, achieving this milestone with a 94-point increase over its previous year’s performance.
With an Industry Average Dealer Satisfaction score of 768, there has been a single-point increase from last year. ‘Product’ scores the highest across all categories, indicating that the industry consistently provides competitive, well-supported and innovative products that meet customer expectations. After-Sales related areas assume the highest importance amongst all factors, followed by Sales. However, despite being the most improved factor over the past two years, ‘Business and Viability’ remains the lowest-scoring factor.
While 4-wheeler mass market dealers are more satisfied compared to last year, Dealer satisfaction in the 2-wheeler and CV segments has declined.
Opportunities for enhancement
- Provide support in clearance of above 60 days ageing vehicle stock
- Provide support in clearing unsold vehicle stock at change of calendar year
- Increase in warranty labour rates for better gross margin in workshops
Segment specific observations
In 4-Wheeler Mass Segment, dealers expressed concerns about the buyback or write-off policy for unsold spare parts inventory and the need for support in covering the carrying costs of stocks in transit. They also highlighted the importance of ensuring dealership viability, overall profitability, and greater involvement in OEM policymaking. However, dealers expressed satisfaction with the OEM’s extended warranty policy, as well as the reliability and range of products offered to customers.
In Commercial Vehicle Segment, dealers emphasized concerns regarding vehicle sales margins, overall dealership profitability, ensuring long-term viability, and a stronger desire for involvement in OEM policymaking. Dealers were quite happy with the overall product range and quality of fully built vehicles, and expressed satisfaction with the responsiveness of the OEM sales team
In 2-Wheeler Segment, the biggest concern which the study highlighted was OEMs were not supportive on buy back of dead stock of parts and they were not open to dealer inputs in terms of policy making and multi-brand outlets point of view. On the positive side, the study found that OEMs were fair in acceptance and rejection of warranty claims, product reliability & range as well as the training program for customer facing team.