Q: Congratulations on assuming the charge of the President of FADA. What are your immediate priorities?

Gulati: Thank you!

The past eight to nine months have been a challenging time for the entire humanity and every business sector. It has been a difficult phase for the dealer fraternity too. We have worked in very adverse conditions with zero business and zero earnings, along with a high operational cost. Post reopening of dealerships, proper decontamination and sanitisation of the entire premises, vehicles, employees, etc., have added cost to dealers who were already seeing slow sales for over 18 months in the pre-COVID era.

We are a resilient lot, and COVID has taught us to make tough decisions to ensure that our business and community survive, while offering the best of our services to customers. During my tenure, I will rigorously take up all our dealer issues at every possible platform and offer the association the finest representation, better visibility and hearing, offering a competitive business and operational environment to our fraternity.

The automobile industry has been an important driving force in India’s economic growth. Reviving the automobile industry is vital to regain lost momentum in the economy. The Government and the sector need to work together to strengthen the industry, wherein the dealer fraternity is an important element in the system.

One of the key issues which we will be working upon is improving dealer margins. Over the years, profitability has dwindled due to high costs and low operating margins.

Auto dealerships in India are operating at an average net profit level of 0.5 percent to one percent of the total turnover, which is much lower than the global standard, as internationally, dealer margins range from seven percent to 12 percent on selling price of the vehicle.

We have already written to SIAM about this, and we will further strongly urge all our OEMs to make the dealer business more sustainable and shockproof.

While we were trying to bring auto dealers under the ambit of MSME, we will up the ante further and make sure that dealers are treated at par with other businesses who are reaping the benefits of being an MSME.

Further, as a category, 2-wheelers comprise 75 percent of the sales in India, and I am working to make an exclusive 2-wheeler vertical at FADA.

This will specifically work on the nuances of 2-wheeler dealership such as sub-dealers, brokers etc. The dynamics of 2-wheeler dealers are very different from 4-wheeler dealers and hence need special attention. As they say, fortune is at the bottom of the pyramid!

FADA will continue to take up issues concerning regulatory and legislative burdens, representing the dealer fraternity across every possible platform. We will continue to reach out to our principals and build strong relationships moving ahead.

Q: FADA has been working on increasing dealer margins for ages but ends up in a stalemate. Where is the issue? How are you going to tackle this?

Gulati: Yes, this is one issue which we have been working for many years, but efforts were not made concretely until sometimes back. It’s during the 2nd Auto Retail Conclave, when we brought up the issue to our executive committee, had a panel discussion exclusively on dealer margins. There onwards, we started building momentum with continues efforts in this direction, and a few months back we also did a study on dealer margin offered by individual OEM to their respective dealers across the product lineup. This was an eye-opener for the entire fraternity as nothing of this sort was brought out in the past; this showcased that Indian dealer’s community were working on a minimal margin which was way below the global standards.

I am happy to mention that post this study, few OEMs have reviewed their dealer margin, few are in discussion with their management and respective dealer council. However, the increased margins are still not at a level which we have been asking for, but a movement has started, which is quite encouraging for the entire community.

Dealership business has a significant daily expense which is addressed by the dealer from his marginal profit. A better profit margin will help the dealer to re-invest a subsequent amount of his earning for the development and expansion of his business, which in return will add up a new business to OEMs.

We will continue to do this kind of studies in times to come and also keep negotiating with our principals as they also understand that their first customers are not in good shape and they require higher margins to sustain their business.

Q: What according to you are the skill gaps persist in the automotive industry still and how FADA is addressing this?

Gulati: Skill gap is a subject which is never-ending as technology keep changing, and we need to make a continuous effort to upgrade our manpower. In recent time, the automobile industry has gone a long way in terms of technology upgrade.

To address this change, all the three auto Associations (Automotive Component Manufacturers Association of India (ACMA), Federation of Indian Automobile Dealer Associations (FADA) and Society of Indian Automobile Manufacturers (SIAM)) have come together in tune with National Skill Development Council and created ASDC (Automotive Skill Development Council) which looks to reduce the gap in between yesterday’s skills and today’s requirement. FADA has been making a continues effort to keep our dealership manpower at par with the newer technologies.

At FADA, we are starting up with a FADA Academy which will hold courses for Dealer Principals and their Chief Experience Officers to train them in running an efficient dealership business from all aspects.

Q: With more than 50 percent of the work in purchasing any vehicle done online, where do you see the role of dealers in the future? Do you see the new trend fuelling unemployment further?

Gulati: Getting prospective customers through the online route is a growing trend. Dealers and manufacturers have been active on online platforms for quite a long time now. The pandemic is the reason for this change in consumer behaviour. Earlier, customers had to visit dealerships several times before the final buy. e.g. all loan formalities, document verification, vehicle test drive etc. These are now offered online or at the doorstep. But for the final sale, customers have to visit the dealerships to test the vehicle and take delivery.

Today every customer is well informed. The vehicle-buying experience involves several steps, right from an online search, specific automobile website visits, going through views, reviews, product comparison, collecting information from peers, social media and users and evaluating a brand, product and its services.

Only after doing all these research consumers make their decision. It is not just a transaction for the customer, but more about in getting into a relationship of trust. That is where the dealerships come into play. Every customer wants to experience the vehicle physically before closing the deal. More importantly, they want to meet up face-to-face with the dealer and satisfy themselves before committing to this high-ticket purchase.

I don’t think there is any change in the playbook, but digital has now moved from “Nice to have” to Necessity. In this COVID era, with total lockdown, digital marketing has played a significant role in boosting sales and smooth execution. Every dealership has initiated digital training of its manpower, equipping them to conduct sales coordination through a digital platform. This initiative has further enhanced its sales and service reach. Dealerships must be the most frugal and flexible link across the automobile network.

Dealers and dealerships have always been the face of the brand and will continue to be so. I don’t see any immediate challenge or threat to the dealership business. However, with companies being more aggressive and active on online platforms, this will add on to dealership engagement with the brand and the customers, helping them further to enhance their sales and service reach and experience.

Q: What are the challenges you face with emerging technology trends like vehicle electrification?

Gulati: I don’t see vehicle electrification as a challenge for the dealer fraternity. The dealer community has been one of the most adaptable segments of the automobile ecosystem. We have always strived to keep ourselves at par with the manufacturers, and it’s business requirement, product and services utility. The dealer business is one business which significantly depends on its skilled workforce across the offerings such as sales, aftersales, engineering, etc. With every new product or technology, the dealer in association with its OEM partner makes certain that it initiates rigorous training for its employees so that it can offer the best service to its customers on behalf of the brand.

As far as vehicle electrification is concerned, India is still at a very initial level as electric PVs still have less than 0.25 percent market share. The EV segment requires immense Government support in terms of infrastructure, subsidy, allowance, recognition, etc., to get the segment to grow. I don’t want to comment on the technicalities of the segment and its products and services. Instead, on behalf of the entire dealer fraternity, I would like to assure that as a community we are committed to offering all necessary support and service to the Government for its vision about the EV industry.

Q: Episodes like FIAT & Peugeot (decades ago) and GM & MAN Trucks (in the recent past) etc., exiting the Indian market continues, leading the dealerships to lurch. What kind of safeguard mechanisms can we have to support the dealer community?

Gulati: Setting up a global brand dealership in India is a massive cost which varies from brands to segment, size of the dealership, region, location, etc. On an average setting up a premium 2-wheeler brand dealership cost somewhere around INR8-10 crore whereas setting up a premium 4-wheeler brand requires close to INR 20 - 30 crore. It is not just the setting up of a dealership which is a cost, the operation of a dealership is also a huge which involves day to day operational cost, vehicle stocking, employee salary etc. The dealer bears all this. As you know, the dealership business operates on a very minimal profit margin; any such activity by any brand ends up leading to capital loss along with loss of jobs in the sector. And now the pandemic poses another challenge for the dealer fraternity.

For example, the recent announcement by Harley-Davidson to discontinue its manufacturing and sales operations in India has left its Indian dealers stranded. This will result in the closure of 35 Harley-Davidson dealerships, with an approximate capital loss of INR 110-130 crores, besides also leading to a job loss of around 1,800-2,000 people at dealerships.

This is the fourth instance of automobile companies exiting India in the last three years (since 2017). Earlier, General Motors, MAN Truck and UM Lohia had quit their Indian operations, leaving their dealers in a similar fix. Due to FADA’s strong intervention and the Indian Government’s full-fledged support, General Motors and MAN Trucks had partially compensated their channel partners, but the UML matter remains unresolved till date.

Had there been a Franchise Protection Act in India, brands like these would not have abruptly closed their operations, leaving their channel partners and customers in the lurch.

We are already working on a draft with our legal team and have initiated communication with other retail associations to bring the Franchise law in India, which will support the dealer fraternity in the dire situation of an exit or termination.

We would also request the Government to initiate the law on priority as this law will help level the playing field for large international and domestic automakers and dealers and also help in regulating over-dealerisation.

Q: What kind of support/guidance FADA has given to its members to tide over the current situation triggered by the pandemic?

Gulati: These are unprecedented times. Everybody is making the best efforts to emerge from it in their own way. The auto dealership is one such business which was deeply impacted by COVID-19. The auto dealership is a very marginal profit business, and we do not have large funds like car and component manufacturers have, which makes it more difficult for us to emerge from this difficult time. The industry was already struggling with a 15 to 16-month slowdown, and the lockdown has pushed the entire industry further back.

FADA has provided all possible and necessary help to its dealer members. At the time of the lockdown, FADA wrote a letter to Prime Minister Narendra Modi to apprise him about the dealers’ issues and suggesting dealership survival and demand revival initiatives. Apart from this, FADA wrote a letter to SIAM making them aware of the situation of the dealers, requesting them to review the dealer margin and extend their support so that dealer can survive these difficult times. FADA quite actively worked to protect dealers from the loss on remaining stocks of BS-IV vehicles from the ban on the sale. The association petitioned the Supreme Court to extend the dateline for sale of these vehicles. At the same time, while securing the future of dealers, FADA demanded that car makers increase the dealer margin to five percent PBT and reduce the infrastructure cost by 25 percent.

FADA conducted online training for its dealer brothers, training them to prepare for maximum work with limited resources. (MT)

As automobiles prices in India go over the roof with not a decent set of four wheels to be found anywhere below INR 10,00,000 on-road, the auto industry – not only in India but the world over seems to adjust for a significant shift in technology, manufacturing, costs, expectations of buyers and the demand of the governments.

The shift in the world over for the auto industry isn’t charming to say the least with global giants like General Motors announcing huge layoffs ahead of potential turmoil. This is despite the automaker acknowledging earlier on the need to invest in alternative fuel technology and offering electric passenger vehicles.

With a market share of about 10 percent, it is behind Tesla in its home market. Tesla commands a market share of 48.2 percent as per the latest data published by Cox Automotive and Kelley Blue Book.

At the centre of the worry among automakers with a legacy the world over seems to be of the uptake in electric vehicles. It is slower than expected besides bringing competition from destinations that were until now least considered.

Besides inflation a big leading factor in markets like US and India, which has driven vehicle prices over the roof, automakers are also grappling with the geopolitical situations that could potentially disrupt the supply chains and drastically alter the prices of crude oil.

With many alternative fuel technologies such as bio-fuels, gaseous fuels and hydrogen still away from enjoying the popularity fossil fuels are, and to some extent electric/hybrid, the shifting world order for the auto industry is made complicated by the rush of various governments to tighten the regulations.

The considerable and quick elevation in prices in automobiles this factor is contributing too, has ensured that automakers address a demand trend that is not something that they were very successful at anticipating.

In India, the passenger vehicle market leader Maruti Suzuki moved away from diesel engines as the BS VI emission norms kicked in. This action seems to reflected through the sales of its Jimny lifestyle SUV as compared to that of the Mahindra Thar SUV, which is available with a petrol as well as a diesel engine.

The fact that a supplier like Cummins continues to invest in IC engines – diesel in particular – in indicative of the fact that the transition to alternative fuel technologies will still take a long time to come through.

When its does come through, it will not be just two fuels such as petrol or diesel, but a range of technologies that will have a higher bearing on costs, sustainability and convenience.

The cost to environment is a factor that seems to be not clear yet in the case of each alternative fuel technology. The gap between ‘green’ and ‘grey’ energy source is yet a considerable one to overcome.  

As it happens, a good number of jobs and enterprises in the auto industry – the world over – will be subject to greater scrutiny in terms of how they are able to navigate past the headwinds and best leverage the tailwinds.

Auto majors like General Motors and Stellantis are coming to face that scrutiny. In India too, the situation isn’t very different.  

The risk where people stop back and continue using their existing vehicles is likely to ensure a rethinking of strategy by the government regarding the route to a greener future that it would want to take without economically jeopardising the future of its people.  

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Bengaluru-based Tijil Rao from Dark Don Racing capped a brilliant run to his entire season, sealing the drivers’ championship in the LGB Formula 4 category in the 27th edition of the JK Tyre FMSCI National Racing Championship recently. 
At a race on the Kari Motor Speedway, Tijil opened a massive lead even before the last round was held. This was despite Saran Vikram – a seasoned racer – of Momentum Racing surprising one and all by winning the first and second races at the sporting event.  
Rao took it easy as Vikram pushed hard with him and Mehul Agarwal not very far behind. While Vikram timed 21:24.212 minutes, Mehul Agarwal timed 21: 25.349 minutes and Rao timed 21: 25.545 minutes. 
Back behind the wheel for the next round, Vikram again won the LGB Formula 4 race lapping well ahead of the field at 28:12.441 minutes. The difference in timing from the morning round was because of an increase in laps from 15 to 20 in the last race. 
In second position, Dhruvh Goswami put up a time of 28:15.943 minutes and Bala Prasath, 28:17. 392 minutes.
In the overall LGB Formula 4 standings, Rao topped with 87 points. Second place went to Bala Prasath with 45 points. Mehul Agarwal was third with 44 points. Vikram clinched the fourth position with 43 points. 
In the thrilling Royal Enfield Continental GT Cup presented by JK Tyre race, Navaneeth Kumar from Pondicherry pushed as hard as he could to win the 10-lap race in 13:01.601 minutes. He was followed by Anish Shetty who clocked a race time of 13:02.411 minutes and Manvith Reddy who managed to clock a time of 13:02.503 minutes. 
Navaneeth sealed the championship for the first time. Behind him, an interesting fight for the second and third places was evident as Anish Shetty and Rohan R were tied at 36 points each. Rohan took the lead of the two as he had won two races in comparison to one by Anish. Rohan was declared overall second.
 

The Supreme Court announced on 6 November 2026 that a person holding a driving license for a Light Motor Vehicle (LMV) can, without any specific endorsement, drive a transport vehicle having an unladen weight of less than 7500 kg.
The five judge Constitution Bench noted that no empirical data has been brought before it to show that LMV license holders driving transport vehicles are a significant cause of road accidents.
The additional eligibility requirement to drive transport vehicles will apply to only those transport vehicles which weigh more than 7500 kgs, the judges noted in their order. 
Adopting a harmonious interpretation of the provisions of the Motor Vehicles Act, 1988, the Court endorsed the decision in Mukund Dewangan v. Oriental Insurance Company Limited (2017) 14 SCC 663. The Court also approached the issue from the perspective of livelihood issues of transport vehicle drivers.
The order mentioned that, for licensing purposes, LMVs and transport vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirement will however continue to apply to, inter-alia, e-carts, e-rickshaws and vehicles carrying hazardous goods.
The additional eligibility criteria specified in the MV Act and MV Rules generally for driving transport vehicles would apply only to those intending to operate transport vehicles exceeding 7,500 kgs – which is medium goods vehicle, medium passenger vehicle, heavy goods vehicle and heavy passenger vehicle.
The Court overruled the decision in National Insurance Co. Ltd v. Annappa Irappa Nesaria to the extent it held that after the 1994 amendment, a separate endorsement is necessary for an LMV license holder to drive a transport vehicle.
The Court said that its authoritative pronouncement would prevent insurance companies from taking a technical plea to defeat a legitimate claim for compensation involving an insured vehicle weighing below 7,500 kgs driven by a person holding a driving license of a 'Light Motor Vehicle' class.

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Ajay Gabhane of Nagpur purchased a Kia Sonet on the eve of Diwali. He mentioned that his family found it right to replace their aging sedan with an exciting compact SUV during the festive season.

Like Gabhane, Tushar Deshpande chose the festive season to purchase a new passenger car during the Diwali festive season in Pune.

It were the individuals like Gabhane and Deshpande who contributed towards a cheerful festive season and Diwali for the Indian passenger vehicle and two-wheeler industry.

After witnessing a slowdown in sales performance during the first and second quarter of FY2023-24, it was the festive season that saw the auto industry uplift its spirit on the back of higher passenger vehicle and two-wheeler sales, albeit asking the underlying challenges that saw dealers and their association go to town stating that inventory levels were at an all-time high.

Until 29 October 2024, passenger vehicle registrations reached a record 4,25,000 units, according to the Vahan data. The previous peak was in January 2024 at 3,99,112 units.

With the Diwali festival spreading into early November, it is expected that that the passenger vehicle registrations will bridge the 4,50,000 milestone. This would mean that almost 15,000 units were registered every day.  

Starting at a slower pace, the festive sales picked up pace only close to Diwali this calendar year with two-wheelers registrations marking the most surge. Inside of the two-wheeler domain, it was the electric two-wheelers that contributed wholesomely to the sales surge. Among India's top electric two-wheeler OEMs, Ola Electric lead the pack with TVS Motors a close second and Bajaj Auto a close third.

Contributing handsomely to what is already considered as the record sales year (FY2024-25) for electric two-wheeler sales stood at 109,643 units as on 28 October 2024, as per the Vahan portal data.

This electric two-wheeler sales performance in the country should provide an interesting insight into how the Indian EV market is progressing and shaping up as well. 

With the main celebratory period of Diwali falling during the last days of October made for an interesting trend in terms of October 2024 sales and November 2024 sales.

With a sale of no less than 115,000 units expected by the time Diwali gets over in early November 2024, a significant uptake in sales performance would have been written in the financial books as compared to the sale of 88,156 units in September 2024.

The superior performance of two-wheeler sales overall as compared to passenger cars during the festive season could be attributed to the uptake in rural markets of the country, read a report by Motilal Oswal Financial Services. During the festive season, the commuter two-wheelers experienced the highest traction among the ICE models and electric powered ones, the report mentioned.

In his LinkedIn post, Ravi Bhatia, President and Director, Jato Dynamics, averred, “India's automotive sector experienced a classic relief rally in October 2024, driven by festive sentiment and aggressive discounting. However, with the impending Vehicle Identification Number (VIN) year change requiring sustained discounts, questions arise about the rally's sustainability.”

The challenges, he said, were the sub-INR 10,00,000 passenger vehicle segment continuing to be under pressure, the upcoming VIN year change necessitating continued discounts and the question of demand sustaining post the festive season.
 

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