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Dealers of Kia Motors, Toyota ‘most satisfied’ with support received from OEM partners: FADA study

Nandana James Mumbai | Updated on September 24, 2020 Published on September 24, 2020

As many as 1,144 dealership outlets were covered pan-India for the study

Dealers of Kia Motors and Toyota Kirloskar were the most satisfied with their OEM partners in helping them navigate the troubles wrought by the Covid-19 pandemic, according to a study released by the Federation of Automobile Dealers Associations (FADA) on Thursday.

While most automobile dealers posted weak satisfaction levels, OEMs like Kia Motors and Toyota Kirloskar in the four-wheeler mass market, Audi India in the luxury market, Hero MotoCorp in two-wheelers and Mahindra & Mahindra in commercial vehicles (small and light) met expectations of their dealers relatively better than others, it said.

The study titled ‘Covid-19 dealer support satisfaction study’ was undertaken by FADA with Singapore-based consumer-insight led consulting and advisory firm PremonAsia to gauge how OEMs supported dealers to tide through the challenges wrought by the pandemic. As many as 1,144 dealership outlets were covered pan-India for the study, which was conducted during the July-August. Whether the support received by dealers was enough or if the OEMs could have done more to bail out their “first customers” (dealers) was the objective of the study, said FADA.

According to the ‘satisfaction index scores’ or satisfaction levels among dealers on a maximum of 1,000 points, only Kia Motors (736 points) and Toyota Kirloskar dealers (641 points) recorded a score above 600 in the four-wheeler mass market segment. Maruti Suzuki (574), M&M (519), Hyundai Motor (518), Ford India (498), Tata Motors (449) and Honda Cars (404) followed suit in this segment.

In the luxury four-wheeler segment, at 610 points, only Audi India got a score above 600. In the two-wheeler segment, at 623 points, only Hero MotoCorp got a score above 600, closely followed by Honda Motorcycle and Scooter India at 567 points. Royal Enfield, Suzuki Motorcycle, Bajaj Auto, TVS Motor and Yamaha Motor followed suit. In the three-wheeler segment, Bajaj Auto had the highest score of 559 points. In the medium and heavy CVs, Volvo Eicher Commercial Vehicles had the highest score of 449 points, followed by Tata Motors (448) and Ashok Leyland (386). In the small and light CV segment, M&M had the highest score of 607 points. Tata Motors came last in this segment with 383 points.

Satisfaction levels

“All segments of the market have recorded a weak satisfaction score below 600 (on a 1,000 point maximum), which is understandable given that no one can be prepared in advance for handling such a calamity,” said Rajeev Lochan, Founder and CEO, PremonAsia. The satisfaction levels were gauged on the basis of how OEMs have managed “hygiene issues of support in the areas of customer communication and dealer manpower training, while pleasantly delighting their dealers through better term loans to tide over working capital needs,” he said.

The study probed owners and CEOs of dealerships based on the support received by them on matters like finance, customer communication, dealer manpower, lockdown, re-start of business, as well as future business evolution, FADA said. Kia dealers reported stronger levels of satisfaction in areas like communication and dealer manpower related matters, the study found. Toyota dealers reported stronger levels of satisfaction when it comes to financial support, it said.

The Covid-19 outbreak has dealt a blow to automobile dealers, said Vinkesh Gulati, FADA. “Many OEMs came forward during these testing times and offered support to dealers with various means. While some dealers were better off, some received almost nothing in such trying times. Hence, it became very essential for FADA to gauge how the principals treated their channel partners, their first customers,” he said.

About 46 per cent of the dealers covered under the study have two primary concerns, regarding support for future business evolution as well as re-starting of business post the lockdown, said Gulati. “What came out commonly across all the verticals was that dealers expect OEMs to improve their profitability,” he added. While the expectations by dealers from the OEMs varied depending on the segments, expectations for financial support were the highest among CV dealers, the study said.

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Published on September 24, 2020
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