By T. Murrali
India’s automobile dealerships are standing at a crossroads. Whether it’s passenger cars, two-wheelers, or commercial vehicles, dealers today face a fast-evolving landscape shaped by digital disruption, changing customer expectations, new technologies, and shrinking profit margins. Each segment has its own battles — from electrification and online buying trends to rising costs and shifting market dynamics.
At the recently held 7th Auto Retail Conclave, organised by the Federation of Automobile Dealers Associations (FADA), industry leaders came together to discuss these challenges. The panel explored how dealers across segments could reinvent themselves — turning uncertainty into opportunity, and redefining what it means to stay relevant in a transforming mobility ecosystem.
The panel comprised some of influential leaders shaping India’s mobility landscape, including Mr. Anil Sekhar, Head of Salesforce Excellence, Commercial Vehicles, Tata Motors Ltd; Mr. Ashutosh Varma, Chief Business Officer – IBU, Hero MotoCorp; Mr. Jyoti Malhotra, Managing Director, Volvo Car India; Mr. Nalinikanth Gollagunta, CEO, Automotive Division, Mahindra & Mahindra Ltd; Mr. Sanjeev Kumar, President and Head of Medium & Heavy Commercial Vehicles (MHCV), Ashok Leyland; Mr. Tarun Garg, Whole-time Director and Chief Operating Officer – Sales, Marketing, Service & Product Strategy, Hyundai Motor India Ltd; Mr. Yogesh Mathur, Director – Sales & Marketing, Honda Motorcycle & Scooter India (HMSI); and Mr. Bharat Kumar Chordia, Executive Committee Member & Director, Khivraj Automobiles Pvt Ltd. The session was moderated by Mr. Hormazd Sorabjee, Editor, Autocar India.
Rethinking Inventory
One of the biggest challenges for dealers today is managing inventory — a balancing act between having enough cars to sell and avoiding excess stock. As Mr. Tarun Garg, pointed out, inventory is a “necessary evil.” Without it, sales and profits stall; but too much of it locks up working capital and creates financial stress.
He noted that the past few years have been unpredictable. Strong demand during 2021–23 left dealers asking for more cars, but since mid-2024, market softening and global uncertainties have reduced the intake. He emphasised that better forecasting, not guesswork, is the key to stability. Dealers, he said, must be more hands-on in planning what models and variants they need rather than leaving it entirely to manufacturers.
He shared that even as a COO, he personally monitors production and variant planning “colour by colour,” because forecasting, though unglamorous, directly impacts profitability. He urged dealer principals to treat it as a core business function, not a back-office task.
Mr. Garg also highlighted the role of digital transparency through the VAHAN system, which now allows real-time tracking of vehicle registrations. With most States joining the platform, it’s helping align production, dispatch, and retail data more accurately.
To tackle aging stock, Hyundai regularly rolls out schemes to help dealers clear older inventory — including vehicles and spare parts. He assured that the company remains proactive in supporting its partners, stressing that efficient forecasting, transparent systems, and timely action are the real drivers of dealer profitability.
Data-driven Discipline
For Mr. Anil Sekhar, the key to dealer profitability lies in controlling one crucial factor — inventory and interest costs. Over the past few years, Tata Motors has transformed the way it measures dealer performance by shifting the focus entirely to VAHAN market share, making it the core metric for incentives.
This shift has helped bring greater discipline and transparency to inventory management, reducing the old practice of OEMs pushing excess stock onto dealers. Technology now plays a central role in this transformation. Mr. Sekhar shared that Tata Motors has implemented a digital planning platform, where dealers provide real-time forecasts based on their sales pipeline. These inputs are then directly used for production planning, ensuring a tighter balance between supply and demand.
He added that inventory levels are monitored every 15 days, ensuring stock remains healthy and in sync with actual retail movement. The result: leaner inventories, better cash flow, and a more sustainable partnership between manufacturers and dealers.
Precision over guesswork
Effective planning and accurate forecasting have become vital for every automaker–dealer partnership. Mr. Nalinikanth Gollagunta explained how forecasting now needs to be far more granular, with dealers providing detailed monthly requirements two to three months in advance. This approach, backed by data on past sales performance, helps identify real demand trends and avoid random dispatches. Though still in early stages, Mahindra’s digitisation efforts are already showing encouraging signs of aligning supply with ground-level momentum, he pointed out.
From a premium brand perspective, Mr. Jyoti Malhotra emphasised that forecasting is even more critical for companies assembling vehicles locally, as market conditions can shift by the time imported kits arrive. To manage this, Volvo Cars India has reduced the number of variants and colours per model, simplifying inventory and improving planning accuracy.
He also highlighted the often-overlooked challenge of managing spare parts inventory. The company’s inventory management system uses algorithms to analyse consumption patterns, seasonality, and order frequency, automatically generating restock orders for dealers. This ensures timely availability without overstocking.
Both leaders agreed that technology can greatly enhance forecasting, but its success depends on shared responsibility. Dealers must take ownership of forecasting, as they best understand customer demand on the ground. With collaboration and smarter digital tools, forecasting is evolving from a reactive process into a data-driven partnership shaping the future of retail efficiency.
Smarter Systems
Sharing the two-wheeler industry’s perspective, Mr. Ashutosh Varma said the real challenge lies in achieving the right inventory balance — especially for brands with wide product ranges and multiple SKUs. Forecasting remains a weak link in the chain. When too many people are involved, accuracy suffers, leading to mismatched supply and demand. He emphasised the need for system-driven forecasting tools that can predict retail sales more precisely, reducing dependence on wholesale numbers as the key performance measure. The industry, he said, must transition from a wholesale-based approach to one that reflects true retail movement, aided by platforms like VAHAN.
He also highlighted the growing complexity of spare parts management. With more than 30,000 SKUs to handle, forecasting and liquidating inventory efficiently is tough, especially when dealer-level data is inconsistent or outdated. Hero MotoCorp is working on refining this system, but he believes meaningful progress will come only through closer collaboration between OEMs and dealers — using better data and smarter technology to make retail forecasting more reliable and profitable.
Future-ready Network
Mr. Yogesh Mathur shared how the company follows a meticulous forecasting and planning process that begins almost five months before the new fiscal year. HMSI gathers demand projections from each dealer and builds its production plan around those inputs — a process internally known as Niguri.
However, he admitted that forecasting remains complex, especially with several variants and over 100 colour combinations. Predicting demand from the head office, he said, is never easy. That’s why the company relies on real-time market data and dealer feedback to stay aligned with consumer trends. The company also reviews its plans every month, locking in production commitments two months in advance to stay flexible and responsive.
Mr. Mathur urged dealers to take an active role in analysing market signals and customer preferences, noting that accurate forecasting directly affects their profitability and business viability. With better data systems at both OEM and dealer levels, he believes the industry can move toward more stable inventories, fewer stock imbalances, and a healthier dealer network ready for the future.
Building skills, not just teams
As dealerships expand across the country, finding and retaining skilled manpower has become one of the biggest challenges in the auto retail business. Talking on behalf of dealerships, Mr. Bharat Kumar Chordia pointed out that with every manufacturer adding outlets, competition for talent—especially at the leadership level—is intensifying. Skilled technicians are also in short supply, as new-generation vehicles, particularly EVs, demand a completely different set of skills. Traditional mechanics must now be retrained to handle high-voltage systems and software-based diagnostics.
He suggested a stronger partnership between OEMs and Industrial Training Institutes (ITIs). Many carmakers already sponsor ITI programmes, sending trainers to prepare students for dealership roles. Such structured pipelines, he said, will help create a steady flow of trained manpower while reducing hiring costs. Mr. Chordia also called for an industry-wide policy, through FADA or OEMs, to curb employee poaching and protect the time and investment spent on training.
Mr. Gollagunta viewed the shift to EVs and software-defined vehicles as both a challenge and an opportunity. With more digital and diagnostic work, he sees scope to bring greater diversity into workshops — including women technicians. Mahindra has partnered with ITIs and adopted the internship programme to build future-ready talent, supported by continuous training modules and the use of emerging tools like GenAI to enhance learning efficiency.
Adding to the discussion, Mr. Sanjeev Kumar noted that retaining young talent is becoming harder as career options beyond the auto industry grow rapidly. The key, he said, lies not just in pay but in motivation — giving employees purpose, growth, and recognition. Many dealerships and OEMs are now focusing on mentorship and engagement programmes to keep their workforce inspired and connected to the evolving world of mobility.
Turning complaints into compliments
In today’s hyper-connected world, social media has transformed customer feedback into a powerful force that can make or break reputations overnight. Every comment, tweet, or post spreads fast, and as Mr. Garg observed, “It’s a huge risk — but also a reminder that every customer, reasonable or not, deserves to be heard.” He urged dealers to take responsibility as brand ambassadors, handling complaints with empathy and urgency instead of passing the blame.
Mr. Gollagunta agreed that complaints are often symptoms of deeper, shared issues. Mahindra now uses WhatsApp-based communication with customers during service visits to ensure transparency and prevent dissatisfaction before it escalates online. He cautioned dealers against directing unhappy customers to social media, stressing that problems must be resolved collaboratively.
From the two-wheeler perspective, Mr. Varma said the brand receives about 25,000 escalations a year out of a lakh daily workshop visits — proof that most interactions go smoothly. “Each complaint,” he said, “is an opportunity to turn a bad experience into a loyal customer.”
Mr. Mathur echoed this, calling customers the true “boss.” He reminded dealers that an unhappy customer can tell 11 others, while a happy one may tell only two — underscoring why quick response and courteous behaviour at dealerships matter more than ever.
Mr. Sekhar shared that his company monitors social media round the clock, acknowledging every complaint within 15 minutes and aiming to resolve it within three days. For him, a structured, joint framework between OEMs and dealers turns social media from a threat into a platform for trust-building.
Mr. Kumar added that in the commercial vehicle business, every breakdown affects a customer’s livelihood. “Each issue is a chance to improve — not just fix a truck, but strengthen our bond with the customer,” he said.
Across brands and segments, the message was clear: in an age where one viral post can define a brand, proactive communication, collaboration, and empathy are the most powerful tools to turn complaints into confidence.
Digital shift and brand identity
The rise of multi-brand outlets in the two-wheeler market continues to spark debate. Mr. Mathur cautioned that such outlets often dilute brand identity and weaken customer relationships. He stressed that direct engagement with customers builds long-term trust and steady income from service and spares — something shortcuts can never replace. Mr. Varma agreed, saying the issue can only be solved through joint commitment from OEMs and dealers, backed by smarter outreach and new-age models like e-commerce integration to improve market reach without compromising brand clarity.
The discussion then turned to the changing digital landscape. Mr. Garg highlighted how digital inquiries have surged from 10% to nearly 45% of total leads. He noted that dealers following an “always-on” digital investment strategy — consistently engaging customers through online tools — perform far better than those using sporadic campaigns. Although costs have risen, conversions from digital leads have improved to nearly 9%, narrowing the gap with traditional sales.
Mr. Gollagunta added that AI is now transforming lead management through “Agent AI,” which filters and qualifies leads before reaching human agents, improving efficiency and lowering costs. Mr. Malhotra said AI brings precision to customer targeting, helping identify high-potential buyers based on digital behaviour — vital in the niche luxury segment.
Mr. Chordia summed it up stating that in today’s world, a digital inquiry has a 20-minute life. “If you don’t respond instantly,” he said, “the customer moves on.” With online searches growing every day, dealerships must be faster, smarter, and fully digital — because the future of retail is already here.
