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 the news of a seven-seater C-segment SUV being tested by Nissan in India gathers speed (besides the news that Renault will launch the new Duster as the Bigster in the next few months), the Renault Group and Nissan have announced new strategic projects. 
The most important of these is the restructuring of the Indian Renault Nissan Alliance entity with Renault Group buying out the 51 percent stake of Nissan, making Renault Nissan Automotive India Private Ltd (RNAIPL) its fully owned subsidiary. 
Despite this change, Nissan will maintain its presence in India with a strong focus on enhancing market coverage. RNAIPL will continue to support Nissan’s production of models, including the New Nissan Magnite in India. 
With Nissan choosing Renault Group to develop and produce a derivative of Twingo that it has designed, the restructuring of the Indian business that was until now a well-honed alliance effort with almost equal-equal investment by both the auto makers, the Renault Group and Nissan have entered into a new alliance agreement that would increase the flexibility of each of the two regarding their cross-shareholdings. This would be done by setting the lock-up undertaking at 10 percent instead of the current 15 percent. 
Nissan would be released from its commitment to invest in Ampere while continuing the agreed product projects.
 Luca de Meo, CEO of Renault Group, commented on the significant development: “As a long-time partner of Nissan within the Alliance and as its main shareholder, Renault Group has a strong interest in seeing Nissan turnaround its performance as quickly as possible. Pragmatism and business-oriented mindset were at the core of our discussions to identify the most effective ways of supporting their recovery plan while developing value-creating business opportunities for Renault Group. This Framework Agreement, beneficial for both parties, is the proof of the agile and efficient mindset of the new Alliance. It also confirms the attractiveness of our products with Twingo as well as our ambition to grow our business on international markets. India is a key automotive market and Renault Group will put in place an efficient industrial footprint and ecosystem.”
 “Nissan is committed to preserving the value and benefits of our strategic partnership within the Alliance while implementing turnaround measures to enhance efficiencies. Our goal is to create a more agile and effective business model that allows us to respond quickly to changing market conditions and conserve cash for future investments. We remain committed to the Indian market, delivering vehicles tailored to local consumer needs while ensuring top-notch sales and service for our existing and future customers. India will remain a hub for our research and development, digital and other knowledge services. Our plans for new SUVs in the India market remain intact, and we will continue our vehicle exports to other markets under the “One Car, One World” business strategy for India," said Ivan Espinosa, President and CEO of Nissan. 
 

Rapido, India’s leading ridesharing platform and one of the country’s youngest unicorns, has expanded its Pink Mobility initiative nationwide to create sustainable earning opportunities for women, championing employment generation, financial independence and skill development. In this direction, the company has signed a memorandum of understanding (MoU) with Azad Foundation and Sakha Consulting Wings.

Through this partnership, Rapido is committed to creating job opportunities for women drivers through the platform, ensuring a fixed monthly earning opportunities up to INR 25,000 for female captains. It will also help trained women drivers with vehicle procurement, registrations, mentorship, safety training and awareness sessions. Further, it will collaborate with policymakers to address the systemic challenges faced by women drivers through joint initiatives with Azad Foundation and Sakha.

Rapido held an event at the India International Centre in New Delhi with the subject ‘EmpowHer: Driving Financial Inclusion and Empowerment’ to mark this milestone. Prominent speakers like Srinivas Rao, National Lead at Azad Foundation; Dr Arpita Mukherjee, Professor at ICRIER; Barsha Chakraborty from Breakthrough; Anjana from Sakha; Meenu Vadera, Founder of Azad Foundation; Sunaina Kumar, Senior Fellow at ORF and Executive Director at Think20 India Secretariat; Bornali Bhandari, Professor at NCAER; and Shweta Aprameya, Founder and CEO of ARTH and Co-Founder of HAPPY were among the programme's captivating panel discussions and thought-provoking fireside chats. Talks focused on important topics including establishing fair career paths, resolving safety concerns and improving financial literacy for women working in non-traditional fields.

Shravya Reddy, Chief of Staff, Rapido, said, “We are deeply grateful to the esteemed panellists and guests who joined us today, sharing invaluable insights on breaking barriers, advancing women’s empowerment in mobility and fostering financial independence. Empowering women is central to Rapido's mission, and the nationwide expansion of our Pink Mobility initiative reflects our commitment to creating a more inclusive mobility ecosystem. These discussions are critical to driving meaningful change for women in the workforce. We deeply appreciate the invaluable support from state governments, policymakers and our partners, who have enabled this growth. Above all, we are inspired by our incredible female captains whose resilience and dedication drive this initiative. Through our collaboration with Azad Foundation and Sakha, we are dedicated to offering women meaningful employment opportunities and equipping them with the resources they need to succeed. We look forward to expanding access to employment and financial independence for thousands of women across India."

Meenu Vadera, Founder, Azad Foundation and Sakha, said, "Gender equality and ensuring women are able to realise their human rights is the cornerstone for societal advancement. At Azad Foundation and Sakha, our mission is to enable women empower themselves, gain essential skills and earn sustainable livelihoods with dignity. Our partnership with Rapido reflects a shared commitment to creating an inclusive and equitable mobility sector. Together, we are proud to enable women to achieve financial independence and succeed in non-traditional roles, contributing to a more inclusive future."

Routematic, a leading corporate mobility solutions provider, has appointed Chidananda Murthy as Vice President – People and Culture with immediate effect.

Murthy has more than 20 years of experience in HR leadership positions with top international businesses. He oversaw the HR department for Walmart Global Sourcing in India, Bangladesh and Pakistan before joining Routematic. In this role, he oversaw company development, succession planning, talent retention programmes, talent evaluations and HR operations for the area. Additionally, he has successfully led workforce transformation, leadership development, post-M&A integrations and HR strategy while working with Nokia Networks, IBM, Oracle and Huawei. Murthy will oversee Routematic's people strategy, organisational culture and talent development in this capacity, promoting an inclusive and productive work environment. With a strong emphasis on long-term development and worker satisfaction, Murthy will be instrumental in propelling the business into its next stage of expansion.

Kavitha Ramachandragowda, Co-Founder & Executive Director, Routematic, said, "Chidananda's expertise in human capital management will be crucial as we scale our sustainable mobility solutions and expand our organisational footprint. His strategic leadership will not only strengthen our people-first culture but also ensure we continue to attract, retain and nurture top talent while fostering a culture of innovation, collaboration and inclusivity."

Murthy said, “Routematic is at a pivotal growth stage, and I’m excited to help shape its people strategy. We are committed to fostering an empowering and inclusive culture – one that attracts top talent, nurtures innovation and drives long-term success. As we work towards redefining corporate mobility, I look forward to contributing to Routematics’ growth, well-being and transformation."

With Chinese brands like BYD, MG and Polestar gaining traction in Europe, the US electric vehicle brand Tesla has lost much of its stream since the last two months. Tesla registrations have plunged, according to a recent report of Jato Dynamics. The Elon Musk led brand saw its market share fell to 9.6 percent in February 2025 – the lowest it has been during the month of February over the last five years. Its year-to-date market share fell from 18.4 percent in 2024 to 7.7 percent this year. 

A total of 966,300 new passenger cars were registered in Europe in February 2025, marking a decline of three percent, compared to the corresponding month last year. As per the Jato Dynamics report encompassing 28 markets, sale of automobiles witnessed a decline in Germany, Italy, Belgium, the Netherlands, Switzerland and Ireland mainly. The year-to-date registrations fell by two percent to a total of 1,962,850 units.

Felipe Munoz, Global Analyst, Jato Dynamics, averred, “There are still no clear signs of recovery in the European automotive industry. Uncertainty in the domestic market is being further complicated by challenges in both China and the US.”

In February 2025, the registrations of battery electric vehicles (BEVs) increased by 26 percent to 164,000 units – the highest volume on record for both the month of February and the period of January to February. A total of 329,700 units were registered, up by 31 percent.

 Of the opinion that Tesla is experiencing a period of immense change while pointing at an increase in electric vehicle registrations in Europe, Munoz said, “In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version the Model Y – its best-selling vehicle – in anticipation of the introduction of a new refreshed version.”

“During this process, brands often experience a drop in sales before they return to normal levels, once the updated model becomes widely available. Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover,” he added.

The registrations of the Model Y fell by 56 percent to 8,800 units in February 2025. The registrations of the Model 3 fell by 14 percent to 6,800 units.

“The difference in volume drops between these two vehicles suggests that the decline in the brand’s overall sales is more firmly rooted in the Model Y changeover than Musk’s political activity,” Munoz articulated. “However, it will be interesting to see to what extent demand rebounds once the new Model Y hits markets across the region,” he expressed.

Chinese brands outpace Tesla for BEV sales

The difficulties that Tesla is currently facing have created opportunities for some of its competitors. In February, Chinese-owned car brands registered 19,800 new electric vehicles in Europe, outpacing Tesla which registered just over 15,700 units. In the same month last year, the former registered 23,182 units compared to the 28,131 registered by Tesla.

The best-selling Chinese-owned car brands in February 2025 turned out to be Volvo, BYD and Polestar. While Volvo recorded a 30 percent drop in BEV registrations, BYD and Polestar made substantial gains, with increases of 94 percent and 84 percent respectively. Xpeng also performed well with more than 1,000 units, closely followed by Leapmotor with almost 900 units. 

Renault Group shines

Volkswagen group continued to lead the market with share of 25.8%. Stellantis followed in second position but lost 2.6 points of share when compared to February 2024 due to double-digit drops at Citroen, Opel/Vauxhall and Fiat. Renault Group was the month’s top performer, with a 12 percent increase in volumes and a market share gain of 1.5 points. The group’s strong performance in February can be attributed to positive results posted by the Renault Clio, Dacia Duster and the new Renault Symbioz and Renault 5. 

Much of Renault’s success was found in the BEV segment, with 9,400 BEVs registered in February, up by 96 percent. The French manufacturer was only outperformed by Volkswagen, which recorded a 108 percent increase in BEV sales. Other strong increases within the BEV segment included Audi (up by 67 percent), Kia (up by 56 percent), Skoda (up by 63 percent), Citroen (up by 190 percent), Cupra (up by 179 percent), Mini (up by 804 precent) and Ford (up by 146 percent). In contrast, Tesla, Volvo, MG, Fiat, Jeep and Smart recorded a sales decline in the respective month.   

The Dacia Sandero leads again

The Dacia Sandero once again led in the ranking by model as Europe’s most registered new vehicle during the month. Meanwhile, second position was occupied by the Citroen C3, with the new generation already being widely available. The Renault Clio followed closely in third thanks to a 22 percent increase in volumes – the second best within the top 10, only outperformed by the Volkswagen Tiguan, in ninth position, which recorded a 43 percent increase in registrations.

The Tesla Model Y and Skoda Octavia have dropped out of the top ten model rankings, making way for the Dacia Duster and Volkswagen Tiguan. The best-performing models in the top 100 included the Peugeot 3008 (with sales up by 40 percent), MG ZS (up by 47 percent), Skoda Kodiaq (up by 32 percent), Jeep Avenger (up by 40 percent), Volkswagen ID.4 (up by 150 percent), Volkswagen ID.3 (up by 114 percent), Skoda Enyaq (up by 41 percent), Mini Countryman (up by 109 percent), BMW 5 Series (up by 54 percen), Fiat 600 (up by 369 percent), Audi A5 (up by 181 percent), Audi A6 (up by 74 percent), Mercedes E-Class (up by 49 percent) and Cupra Born (up by 64 percent)

Image for representative purpose only.