Tata Motors loses 2 top dealers to rival cos, now gains 2

Sometime back I had posted an email from Mr.Shailesh Bhandari about B U Bhandari shifting to VW. Here is a press clipping discussing the issue. For me : it is not ONLY about margins. I am pretty sure VW is using "all sorts" of muscle power to take away Tata-Fiat dealers

MUMBAI | NEW DELHI: TATA Motors, India’s second-largest car maker, faces the prospect of a churn in its distribution network with rival companies luring away two of its top dealers by offering better margins.

A slow-pick up in sales of Fiat Auto, whose vehicles are distributed in India by Tata Motors, may also have contributed to the exits. Pune-based BU Bhandari Auto , which became a Tata Motors dealer more than a decade ago when the automobile major entered the passenger car market by launching Indica, will distribute products of German car-maker Volkswagen , which is eyeing a larger market share in the booming Indian automobile market. Delhi-based dealer A-One Motors , promoted by Yadur Kapur, will focus on distribution of cars from Honda, BMW and Rolls-Royce.

The promoter of Bhandari Auto, Shailesh Bhandari, is currently in Germany to get a feel of the operations of his new partner. These two dealers together contribute 5-6% of Tata Motors’ passenger car sales, according to automobile industry executives. Tata Motors sold 1.3 lakh units for the period from April to September.

The Tata Motors spokesman confirmed the exit of the two dealers, but said that only seven dealers had left in the past three years. “This has nothing to do with their business or relationship with Tata Motors,” he added. Over the past six months, it has added 10 new dealers taking its total dealership network to 247 as its passenger car sales have been growing at the rate of 44% till September this year, the spokesman said. The company’s new CEO Carl Peter Forster is understood to be overhauling the entire passenger car segment by adding more dealerships to push volumes in a growing market.

Some of the existing ones are expanding network. “Margins are improving, and in the product schemes offered by the manufacturer, the contribution of the dealers has significantly reduced,” said Vinod Sharma, MD, Fortune Motors, a major distributor of Tata Motors vehicles in Maharashtra. Car sales in India are set to rise 12-13% in 2010-11. The Society of Indian Automobile Manufacturers (SIAM) forecast car sales to rise to 1.7 million units in the year to end March 2011.

Stagnating sales from Fiat was an issue, said one of the dealers. “There have been stagnant margins with our A-One business that caters to Tata Motors, while they are much higher in our other dealerships. The overall effect is also coming from Fiat cars whose sales have not grown as expected,” Mr Kapur said. Sales of Fiat cars dropped 8% to 11,863 cars during the past six months. “When we take up dealerships, we never leave it. However, this is a commercial decision,” said a senior offical at BU Bhandari. Multinational companies like Volkswagen, BMW, Nissan and Audi, which are ramping up their India presence, are poaching dealers of Tata Motors, Hyundai and Maruti-Suzuki to access central locations in major cities.

These players are offering 6-8% of the price of a car against 3-4% being given by Indian majors. Not many new entrepreneurs are venturing into the auto dealership business as it involves heavy overhead costs. The dynamics of the auto dealership business is undergoing a change with companies forcing dealers to dole out freebies leading to major decline in margins.

Source : http://economictimes.indiatimes.com...-dealers-to-rival-cos/articleshow/6790139.cms

Re: Tata Motors loses 2 top dealers to rival cos

:sad1

Re: Tata Motors loses 2 top dealers to rival cos

No idea about A-One motors, but B U bhandari was one of the good service centers of Tata/Fiat.
So any new dealership is coming to Pune? I am sure it will come.

Re: Tata Motors loses 2 top dealers to rival cos

@pinakin : we have no other choice but Pandit. So you will have to drive to tilak road to drop your car.

But I can tell you that a new dealership is coming up in Pune. The procedure is in progress.