Two-wheeler dealers are optimistic: Sewells report

In a downturn in the automotive industry, the dealer fraternity is the one that gets directly impacted by the gloom. In India, the automobile industry is reeling under severe drop in sales, except for two-wheeler manufacturers who are experiencing some modest growth. It is therefore obvious that the two-wheeler dealers will be more optimistic compared to their counterparts in passenger cars and commercial vehicles.

In the Inaugural Report of the Sewells Group Automotive Dealer Confidence Index (ADCI), the two-wheelers dealers are the optimistic ones while the car and CV dealers are a bit pessimistic about their business.

Melbourne-based Sewells Group, a global automotive retail performance solutions company, has released the inaugural report of the Sewells Group Automotive Dealer Confidence Index (ADCI) for India. The Sewells Group ADCI is an attempt to capture and quantify the sentiment of auto dealers across the length and breadth of the country, representing a host of brands across product categories. The ADCI will be published quarterly, and will evolve to become a reliable lead indicator of retail sales across brands and vehicle categories, said a company statement.

The inaugural ADCI survey was conducted in April 2014, to capture the dealer sentiment at the end of Jan-Mar quarter of 2014. The inaugural findings are based on 215 dealer responses received from 116 locations, representing passenger cars, commercial vehicles and two-wheelers of 24 different brands.

The timing of the inaugural edition represents an interesting point in time for the economy in general, and the auto industry in particular. March 2014 represents the end of a relatively poor financial year, and with elections around the corner, it is interesting to note the fractured sentiment of automotive dealers in terms of how they feel about the near future.

The ADCI is designed to vary between -100 and +100 where an index score of -100 represents the most pessimistic outlook, and +100 indicates the most optimistic sentiment. The index is based on how dealers see the overall market and their businesses performing in next six months.

The findings of the inaugural survey are given below:

The overall ADCI stands at -20, representing a mildly pessimistic sentiment amongst the dealer fraternity.

The passenger car ADCI stands at -40, representing a moderately pessimistic sentiment amongst passenger car dealers.

 The commercial vehicle ADCI stands at -32, representing a moderately pessimistic sentiment amongst commercial vehicle dealers, but interestingly, a shade more optimistic than passenger car dealers.

 The two-wheeler ADCI stands at +13, indicating that two-wheeler dealers are mildly optimistic about the state of business with a 6-month horizon.

The ADCI survey delves into the following areas:

--The impact of the current economic scenario on the market, as well as the dealership business

--Expected performance of market as well as dealership over the next 6 months

--View on current situation of sales, inventory and profit vis-à-vis same period last year

--View on current situation of sales, inventory and profit vis-à-vis previous quarter

--Expected levels of sales, inventory and profit over the next 6 months

--Future view of manpower strength of the business

The Sewells media release said that this is the inaugural edition of the ADCI survey, and it should be noted that the findings are limited by the absence of trend data. The index should be interpreted as a broad indicator of dealer sentiment at this point. Sewells Group proposes to conduct the ADCI survey every quarter, and intends to capture the opinion of a larger sample size in subsequent editions of the survey.

Managing Partner and CEO of Sewells Group India, Jayesh Jagasia said:“We are excited to launch the first Sewells Group Automotive Dealer Confidence Index for the Indian automotive industry. Automotive dealers are closest to the ‘action on the ground’. They are in constant touch with customers, potential customers, OEM staff and competition dealers. Consequently, each dealer carries a wealth of insight that shapes his / her sentiment about the near future. Sewells Group aims to be able to represent this collective sentiment in the form of an index, whose movement over time will reliably predict the direction of wholesale and retail sales across brands and categories.”

COO of Sewells Group, Dennis Anderson said: “Measurability is a core value of Sewells Group, and the Automotive Dealer Confidence Index exemplifies this. ADCI is a path-breaking and an important endeavour of Sewells Group for all the key stakeholders of automotive industry, and we are looking forward to contributing to the industry via this medium.”

Sewells Group is a leading provider of dealer development solutions and services to automotive companies across Asia Pacific, Africa & Middle East regions. Sewells Group works closely with leading automotive brands to help enhance retail performance by working on three broad areas of dealer business – demonstrated competence, process efficacy and dealership profitability.

Sewells Group India is a leading provider of dealer development solutions and services to the automotive industry in India. Sewells Group India works with leading automotive OEMs and helps them build excellence in the network performance space. Sewells Group India’s clients benefit from the company’s cutting-edge intellectual property and tools in the ‘people, process and profit’ of dealership business.

Source: Sewells Group India