New Innings, Renewed Hopes

Dear friends,

I take this opportunity to express my gratitude and sincere thanks to FADA Council and you all for placing your confidence in me by electing me as the President of this august body. 

I feel honoured to be elected as President of this prestigious organization, especially at this point of time…when FADA is celebrating 50 years of service. The actions initiated 50 years ago have to be applauded for their sincerity and meaningfulness, which made FADA what it is today. 

I believe that the mission we set for ourselves today for FADA is what is going to take us to the century mark. As a team, we are aware, we are at that critical juncture where our actions will have an impact on the future of FADA . With the blessing and support of each of our members, we are confident that, we can effectively work towards the mission.

FADA has come a long way since its inception. FADA has come to be regarded as a prestigious organization and its views and inputs are given due importance. However, I do realize that we need to increase our membership base and work much harder to ensure that the auto retail business gets recognition appropriate to its enormous contribution in terms of investment, revenue to the Central & State exchequers, employment generation and share in the country’s economic activity and GDP.

Needless to mention, a number of new initiatives and activities have been undertaken by FADA in the past few years, in particular. I intend to strengthen the activities already set in motion, especially the ongoing training & development programme under the aegis of FADA Academy.

Another item on the top of my agenda for the next year is to strengthen and step up interaction with the associations of automobile dealers at the city, State and regional levels so that they become a bridge between FADA and automobile dealers in every nook and corner of the country. My endeavour would be to organize as many regional meetings as possible. These regional meetings will not only enable us in FADA Council to interact with the local members, but will also help in identifying the issues at the local or State level and getting valuable inputs from various States for initiating appropriate action at the State and national levels.

I find that service tax apart, most of the issues facing the automobile dealer fraternity are localized and need to be addressed at the local or State level. I assure the regional associations that FADA will pitch in with its support by sharing the norms & practices prevailing in other States and the legal position settled by various judicial rulings & pronouncements.

I do appreciate that the viability is the key issue of concern to most of my fellow dealers, especially in the major cities where the real estate and manpower costs have risen astronomically and gone through the roof, while the sales margins have virtually remained static over the years. The fierce competition in the market, where discounts and freebies are the rule than an exception, coupled with an acute slowdown for over two years, have added to the woes of automobile dealerships. I assure my fellow dealers that this key issue will continue to receive our focused attention.

A study on Competitive Benchmarking of PVs Retail Practices of OEMs in India was conducted and completed by Frost & Sullivan on behalf of FADA. The study brought to the fore a wide divergence in practices of OEMs vis-à-vis their dealers. The study has also identified quite a few healthy practices of certain OEMs, which have acted as a cushion against the severe slowdown in the market. We will closely interact with all the OEMs to put this study to good use.

Considering that the Auto retail business in India is growing in all segments viz., passenger cars, two wheelers, and commercial vehicles, the need for individual focus is imperative. Accordingly, we intend to create verticals to focus on particular segments. The first will be the two-wheeler vertical. We believe that this will ensure the relevance of FADA to the two-wheeler dealers across the country. We propose to hold a two-wheeler dealer convention to address the specific needs & concerns of the two-wheeler dealer community.

As you are aware, FADA has completed 50 years, the organization having been formed in 1964. The celebration of Golden Jubilee of FADA is also simultaneously engaging our attention and very high on our agenda for the next one year. We propose to celebrate the Golden Jubilee in a grand manner by organizing a mega grand event sometime in the middle of March 2015.

I am happy to inform that the process for the 6th edition of Automotive Dealership Excellence Awards (ADEA 2014) has been set in motion. 

Instituted by FADA jointly with Auto Monitor magazine, Automotive Dealer Excellence Awards (ADEA) aim to recognize and reward my fellow dealers who excel in various areas of dealership management, community service and social work. Each successive edition has seen the growing interest and participation of my fellow dealers and industry. The awards presentation ceremony for the 6th edition of ADEA 2014 would be held in March 2015 in Mumbai. 

This year’s awards assume added importance, as the awards presentation function will coincide with the mega event being organized to celebrate Golden Jubilee Year of FADA. The Golden Jubilee Year Celebration event will be adorned by ‘Who is Who’ of Auto Industry and other bigwigs connected with Automotive Business. Therefore, I would request my fellow dealers to participate in the Automotive Dealership Excellence Awards (ADEA) by sending your nomination at the earliest and be part of this grand special occasion in March 2015. 

Adverting to auto market, it is a matter of some comfort that the things have been looking up of late, riding on the expectation from the new Government at the centre that has raised the hopes on the promise of bringing the slowing economy on a high-growth trajectory. Macroeconomic fundamentals are also improving, slowly though.

A heartening development is that the crude oil prices are witnessing free fall, the geo-political tensions in middle-east notwithstanding. The downward spiral of crude oil prices bring a huge relief to the Government in terms of its fiscal management, including its fiscal deficit and CAD, which created a mayhem in the country’s financial market in July–August last year. 

The icing on the cake is that we are going to see a stable rupee, benign fuel prices and softening of inflation in the near future. I am sanguine that the impending reduction in fuel prices will have positive impact on inflation, leading to reduction in interest rates that have also been responsible for dragging down the vehicle sales numbers.

I also wish to draw the attention of the industry to the devastating effect the cyclone Hudud had on the auto retail facilities of our dealer friends in the city of Vizag and the neighbouring areas. The sight is heart breaking. It is, however, gratifying to note that no human loss has been reported by the dealerships. I am in touch with the dealer friends to extend whatever support is required to ensure a quick recovery.

By the time, this issue reaches you, I am sure, you must have celebrated the great festival of Diwali with usual gusto, fun and frolic associated with the festival. I hope that auto market will claw back to the positive growth momentum riding on the festive season and upbeat sentiment prevailing currently.

I would count on your inputs and suggestions. Please feel free to send your views.

With best wishes,

Yours sincerely,

 

K V S Prakash Rao

 

 

 

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