Palpable Excitement as D-Day Draws Near

Dear friends,

There is a palpable excitement within the automobile dealer fraternity as the D-Day draws near. FADA’s mega biennial two-day event, i.e. Auto Summit 2014 is all set to commence on 7th February 2014 at New Delhi.

Auto Summit 2014 is being held at a time when the Indian auto market is going through the worst slowdown in its history. It needs no reiteration that all segments of auto industry have been witnessing acute downtrend for about 21 months now. Moderate growth of two-wheelers is a cold comfort, though. The immediate outlook does not look bright due to the challenging economic environment facing the country. The Government’s decision making has virtually come to a standstill with elections round the corner. In spite of the pious intention of the Government, mining activity and road building activity are not taking off, chiefly as a result of environmental, land acquisition and contractual issues.

Key economic indicators do not inspire confidence either. Inflation is stubbornly sitting at an elevated level well beyond the comfort zone, restricting elbow room for RBI to ease interest rates.  While there has been a downward movement in inflation, it is too little and thanks to the seasonal factors. The experts continue to be wary of the sustainability of downtrend in prices. The uncertainty and volatility continues to beset fuel prices.  The service sector that has been the mainstay of Indian economy in the recent past has been slipping for some time. Economy, as a whole, is growing at a snail’s pace putting pressure on the Government’s finances. The threat of downgrade by the international rating agencies continues to loom large on the horizon.

Considering the macroeconomic challenges and uncertainty prevailing in political space, the auto market is unlikely to pick up in the next 5-6 months. Our hopes rest on the formation of a strong Government at the Centre after the general elections, which can provide impetus to the economy and, as a result, to the auto market.

In view of the sombre mood currently obtaining, the theme: ‘Auto Retail – Survival Mantra’ of Auto Summit 2014 assumes an added importance. Automobile dealerships are finding it extremely difficult to stay viable because of fewer footfalls and retail sales, resulting in excessive inventory build-up, overheads and costs. The unfortunate part is that the automobile dealers do not have much leeway to reduce their costs. 

No wonders, J D Power Asia Pacific in its 2013 Dealer Satisfaction Survey has come up with startling revelations. The study finds that only 44% of the automobile dealers expect to make profit during the FY’ 2013, which is a cause of serious concern and wake-up call for the manufacturers and the Government.

FADA has undertaken another study on ‘Competitive Benchmarking of Passenger Vehicle Retail Practices of OEMs in India’. The study being conducted by Frost & Sullivan, an internationally renowned management consulting firm has been commissioned with the following key objectives: (a) To benchmark the best practices followed by OEMs; (b) To showcase key take-aways for benchmarks which if implemented should support auto retail business; (c) To identify solutions to the difficulties being faced by dealer community to sustain profitability; (d) To bridge & strengthen relationships; and (e) To support & generate a two-way clear, transparent and strong business atmosphere.

The study shall also put forward recommendations for improvement & sustainability of auto retail business. I am sure, the study shall equip the dealer fraternity to be fully aware of the best practices of OEMs for use during interactions.

The presentation of highlights of this study and discussion thereon at which a large number of OEM representatives will be present will be a special feature of the Auto Summit 2014.

I am delighted to inform that Auto Summit 2014, coinciding with 50th Anniversary of FADA, will honour Mr Ratan Tata and Dr Brijmohan Lall Munjal with the Life Time Contribution Awards for the singular contribution made by them in the growth and development of auto industry in India.

As a part of this event, Automotive Dealership Excellence Awards for the year 2013 (ADEA 2013) – an annual activity initiated jointly by FADA & Auto Monitor magazine in 2009 with a view to recognise and reward exceptionally performing automobile dealerships – will also be presented at a gala function in the evening of 7th February 2014. The previous four editions of ADEA evoked a tremendous response.

Another special feature of Auto Summit 2014 is the scheduling of an informal discussion with leaders of industry over tea/coffee, preceding ADEA function.  The occasion will enable automobile dealers to informally discuss and share their experiences with the leaders of industry over tea/coffee and get industry’s perspective of current and emerging scenario.

An International Round Table at which representatives of retail organisations of various countries will participate to discuss issues and concerns and auto retail practices prevailing across the world, is an integral part of the programme of Auto Summit 2014. The Round Table will also discuss the need for franchise laws to protect the interests of automobile dealers in the context of dominance of OEMs in dealer-manufacturer relations.

The programme of Auto Summit 2014 has scheduled six workshops on core issues affecting the brand image, efficiency, HR practices, technology, productivity and profitability of automobile dealerships. These workshops have been scheduled during 2.15 p.m. to 4.30 p.m. on 8th February 2014.

Thanks to the efforts put in by the Auto Summit Committee members and Council members, especially Mr Vinay Nevatia, Chairman, Auto Summit 2014; Mr Rakesh Jain, Director, Auto Summit 2014; and Mr Bharat M Sanghvi, Past President, the programme of Auto Summit 2014 has shaped up very well. There has been an overwhelming response from the Government and the industry.

We are honoured and privileged that Mr Praful Patel, Hon’ble Union Minister of Heavy Industries and Public Enterprises, has kindly consented to inaugurate the Summit and to deliver the inaugural address. Mr Venu Srinivasan, CMD, TVS Motor; Mr Vikram Kirloskar, President, SIAM and Vice Chairman, TKM;  Mr Uday Kotak, Executive Vice Chairman, Kotak Mahindra Bank; Mr K Muramatsu, President, CEO & MD, HMSI; and Mr Albert Gallegos, Director–International Affairs, National Automobile Dealers Association (NADA) will be the Guests of Honour at the Inaugural Session.

The impressive array of speakers does not end with the inaugural session. We shall have ‘who is who’ of auto industry and allied businesses, renowned management & spiritual gurus, who will address and interact with the participants at the Auto Summit.

The theme emphasises the need for out-of-box thinking to tide over the current difficult situation and new mantra for survival.

The 8th Auto Summit provides a common platform for Government, industry, automobile dealers, management consultants, academia and think tank to deliberate and to throw up innovative workable ideas for surviving and steering through the challenging environment the auto market is in today. 

The Auto Summit 2014 is a unique opportunity for my fellow dealers and others in industry & allied businesses to enrich their experiences and equip themselves to stand up to the current and emerging challenges.

I, therefore, appeal once again to my fellow dealers, in particular, not to miss this opportunity and to register for the Summit in large numbers.

I am thankful to the industry leaders and a galaxy of other eminent speakers, who have agreed to address the participants and grace the occasion.

Last but not the least, I am equally gratified by the support extended to the Auto Summit 2014 by the industry and the allied sectors as sponsors and convey my sincere thanks and gratitude to them.

Looking forward to meeting you all at the Auto Summit 2014.

With best wishes,

Yours sincerely,

Mohan Himatsingka

 

 

 

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