Given the formation of a new and stable government, improved market and consumer sentiment and also a decent upswing in vehicle sales, passenger car dealers across brands in India seem to be a happier lot in the first quarter of 2014-15.
18 Jul 2014 | 2683 Views | By Autocar Pro News Desk
Given the formation of a new and stable government, improved market and consumer sentiment and also a decent upswing in vehicle sales, passenger car dealers across brands in India seem to be a happier lot in the first quarter of 2014-15. While two-wheeler dealers are marginally more confident, dealers of ...
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Given the formation of a new and stable government, improved market and consumer sentiment and also a decent upswing in vehicle sales, passenger car dealers across brands in India seem to be a happier lot in the first quarter of 2014-15. While two-wheeler dealers are marginally more confident, dealers of commercial vehicles remain pessimistic about growth.
These findings come from the results of global automotive retail consulting firm Sewells Group’s latest Automotive Dealer Confidence Index (ADCI) survey for India. At the end of the April-June 2014 quarter, the overall index stood at 0, representing a neutral outlook. This is a substantial swing from the previous quarter’s index, which stood at -20. The swing represents a significant positive movement in the level of optimism of automotive dealers.
The index for Q1 FY2014 was calculated on the basis of the survey conducted in the first week of July 2014. Responses were received from 126 dealers, across 75 locations, representing 21 different brands.
The ADCI aims to quantify the sentiment of franchised automotive dealers across the country. Participating dealers represent a host of brands across product categories. The quarterly survey tracks movement in dealer sentiment as a reliable indicator of future sales performance. The index 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 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 year on year.
- View on current situation of sales, inventory and profit versus previous quarter.
- Expected levels of sales, inventory and profit over the next 6 months.
- Future view of manpower strength of the business.
The key ADCI highlights are:
- The passenger car dealer index moved from -40 (Jan-Mar 2014) to stand at -3 (Apr-Jun 2014), a substantial positive jump indicative of a significant positive movement of dealer sentiment.
- The two-wheeler dealer index moved from 13 (Jan-Mar 2014) to 18 (Apr-Jun 2014), reflective of a slight positive movement of sentiment.
- Commercial vehicle dealers continue to remain pessimistic about their business prospects. The CV index fell from -32 (Jan-Mar 2014) to -38 (Apr-Jun 2014).
- The overall index for Q1 FY2014-15 stands at 0, with about 60 percent of respondents indicating that they expect their business to be profitable in the next six months.
Commenting on the survey’s findings, Jayesh Jagasia, managing partner and CEO of Sewells Group India, said: “It is interesting to view the movement of the Sewells Group Automotive Dealer Confidence Index (ADCI) in light of the changes in the political environment. For the first time in over two decades, the country has a government with an absolute majority. The business fraternity expects the government to jump-start the economy. Automotive dealers – an important and influential part of the country’s business fraternity – expect that an improved economic environment will translate into improved sales performance. The ADCI is designed to reliably predict retail sales and, if the index at the end of the April-June 2014 quarter is any indication, good times are around the corner for the industry.”
The Melbourne-based Sewells Group is a leading provider of dealer development solutions and services to automotive companies across Asia Pacific, Africa and the Middle East.