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Auto dealers' concern over shrinking margins

Staff Reporter

Result of tremendous pressure from customers for discounts

NEW DELHI: As New Delhi gears up for biennial Auto Expo that begins on January 12, the Federation of Automobile Dealers Associations (FADA) on Wednesday expressed concern over shrinking margins of automobile dealers.

Addressing a press conference here, FADA President, Binod Agarwal, said with growing competition among automobile markers, there was tremendous pressure from customers for discounts. Moreover, manufacturers also wanted reduction in dealer margins that is currently two-three per cent on maximum retail price of vehicles.

"In future it is going to be hard for automobile dealers to compete in the fast expanding market. At present not only the manufacturers but also the automobile dealers are forced to dole out discounts and freebies to customers to push sales, thus putting more pressure on dealers," Mr. Agarwal said, and hoped that this would not come in the way of sales growth.

The FADA chief said the automobile dealership sector employed around three lakh people. However, they were facing the problem of lack of trained manpower. Significantly, in the next five years, the sector would need another around three lakh trained manpower. "Therefore, the industry and educational institutes need to work in partnership," he added.

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