Q. What are the core focus areas for your dealer partners in a post-COVID world?
For us the following are the three main focus areas for the dealers and retailing:
i) Leveraging technology like digitalisation for customer convenience.
ii) Mindset change, from vehicles to mobility service providers.
iii) Customer loyalty and cost controls including infrastructure costs.
Q. Is the smaller setup becoming the norm going forward? What percentage of sales outlets will be large, small, sub-outlets and mobile outlets?
In Maruti Suzuki multiple size formats exist depending on market size and also location. In larger cities showrooms are limited by size because of space constraints and high costs. In smaller cities showrooms are limited by sales potential.
Having said that, with the geographical dispersal of customer demand, smaller setups are becoming important . If width was coverage and depth was size of the showroom, then I feel width is taking precedence. Also we are looking at not only geographical coverage but also network coverage in the digital landscape. We will continue this multi-pronged approach in future as well
As of today around one third of our outlets are large format and the rest are small format. Over the years we have been quietly building up the smaller format as per the global trends.
We are present in 2005 cities and we don’t have the sub-outlet concept.
Now we have 3140 outlets for Arena, Nexa and Commercial channels in 2005 cities. We also have 550 True Value outlets and almost 400 Driving Schools MDS. Of these, 1658 are 3 S facilities.
Q. What are your strategy for digital outlets?
We have about 1200-plus digital showrooms also.
Note: All the data is an estimation based on the information received from various sources and extrapolated by ETAuto research.
Sales Outlet: Sales Outlet means all kinds of physical outlets/dealerships/touchpoints from where cars were sold.
Average Sales Revenue: This is based on the ballpark average selling price per unit multiplied by total units sold in a year divided by the number of outlets.
Average Selling Price Per Unit : This is an estimated price derived from the price range and the calculation done by ETAuto. It may differ slightly from the exact price.
As a fallout of the pandemic, most of the OEMs are seriously considering rationalization of investments in dealerships to make them leaner, smaller and affordable. Demand for this has been rising since 2019, after the Indian automobile industry and car market in particular began to fall, making many dealers bankrupt and forcing some of them to close their lavish and palatial outlets. The situation worsened with the pandemic and constrained the carmakers to review their retailing strategy. ETAuto analysed the situation in depth and also reached out to the carmakers to find out their plans and strategies. Based on findings Kia India tops the chart in per outlet revenue, while a detailed series on the ranking will be published starting today.
The local units of the French carmaker Renault India sell about 269 units per outlet, including the extended ones mostly in the rural market, after the launch of Triber and Kwid. With an average INR 20.1 crore annual revenue per sales outlet in 2021, the carmaker is ranked 10th. “We have recently initiated a special project, VISTAAR, to amplify and grow our presence in rural India and our dealership teams have recruited specialised sales consultants,” Sudhir Malhotra, Vice President – Sales & Marketing, Renault India Operations, said in an email interview.
The homegrown Utility Vehicle manufacturer Mahindra & Mahindra is on fire with massive bookings for its recently-launched utility vehicle Thar. It had even to appoint an auditor to see that the vehicles are delivered rightly. On the strength of the success of Thar and a decent volume for XUV 300, the carmaker has ignited a revival story after it has been steadily losing market share in the past few years. It had slipped to the third spot as a UV maker form a long-standing pole position. The maker of Bolero and Scorpio – the most successful SUVs in rural India — has a large number of sales outlets in the rural and semi-urban areas, thus making it low on investments for the dealerships in general. The other silver lining among the Mahindra & Mahindra is that they sell an equal volume of pic-ups from the same setup adding an almost additional equal volume per outlet. Ranked 11th according to the annual average per outlet sales revenue of about INR 14.8 crore, it has about 1500 sales outlets including both the small and the big ones. In an email interview with ETAuto, Veejay Nakra, CEO – Automotive Division, M&M, said that today the cost of operating big showrooms is significant and hence the company has revised a lot of existing infrastructure to curb the cost of operation.
For Tata Motors, the size of outlets varies depending on where they are, in cities or in rural areas. Normally the rural outlets will be smaller than those in cities and towns, Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors, said. “At present, we don’t have a sub-outlet concept. But we’re in the process of introducing mobile outlets and we will study their effectiveness,” he told ETAuto in an email interview.
