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ONE IN FIVE AUTOMOBILE DEALERS EXPECT LOSSES IN INDIA: JD POWER

With the increasing number of automobile dealers in India, one
in five dealers expect to be in red in 2013, more than double the
number compared with 2012,according to a study by market
research firm JD Power.
Only 44% of dealers expect to make a profit for the 2012-2013 financial year, according to 'JD
Power Asia Pacific 2013 India Dealer Satisfaction with
Automotive Manufacturers Index'
released today. "Declining profitability for dealerships in India not only highlights the impact that the
slowdown in new-vehicles sales has on the viability of a growing number of dealers, but also
underlines the importance placed
on automakers to provide adequate support to their
respective networks," JD Power
Asia Pacific Executive Director Mohit Arora said in a statement.
According to the study, there was a need to improve the
supply chain with dealers expressing dissatisfaction over
the time taken in delivery of parts
and ease of ordering parts.
"This highlights the need for some automakers to further
support dealers with an improved and more efficient
supply chain," Arora said.
Improving the speed of parts delivery not only allows for work
orders to be handled more efficiently, but also ensures customers are not troubled by unexpected delays or extended wait times, he added.
The study also said the dealers felt an attractive range of vehicles was critical for them and the
automakers to succeed.
Among the manufacturers included in the 2013 study,Maruti Suzuki India and Toyota
performed particularly well in
overall dealer satisfaction,showing improvement from
2012.
"The success of Maruti Suzuki and Toyota not only demonstrates the automakers' commitment to ensuring the dealers' operations are viable,
but it also shows their active support regarding such areas as training, marketing and sales activities," Arora said.
On average, 88% of dealers believed that they definitely
would continue to work with their automaker for two years,the JD Power study said.
Among dealers in the top quartile of satisfaction, 98% expect to be working with the same automaker in 2015. In contrast,dealers who rate their experience with the automaker
in the bottom quartile of satisfaction, only 72% expect to be working with the same name plate in two years' time, it said.
The 2013 India Dealer
Satisfaction with Automotive Manufacturers Index was based on responses from 618
dealership general managers or dealer principles across all main manufacturers. The study was conducted in association with
the Federation of Automobile Dealers Associations (FADA), and was fielded between February
2013 and April 2013.