We conducted a passenger car dealer survey in the tier-I and tier-II cities to take cognizance of the ground realities of a slowing passenger car market. We surveyed 51 dealers across 23 cities and the mix between tier-I and tier-II was 1:1. The dealers belonged to eight OEM players (Maruti, Tata Motors, Hyundai, Mahindra, Nissan, Ford, Renault and Volkswagen).
Key findings of the survey
- Footfalls have declined 5-10% on a yoy basis for most dealers. However, recent trends have been encouraging with footfalls either increasing or stabilizing
- Enquiries for UVs and premium cars have seen a steep fall
- Consumers are preferring the lower variants of the price model ignoring the technological advancements of higher variants
- Discounts followed by freebies including insurance and exchange offers have been the most influencing factors for consumers
- Growth in UV demand was driven by creation of the new affordable UV segment buoyed by increasing gap between diesel and petrol prices
- The recent slowdown in UV segment has been on account of the smaller size of the market leading to higher beta related to excise duty increase
- Almost all respondents feel that it would be tough task to match last year’s festive season and the discount levels will be higher this time around
- Dealer arranged financing has been steadily increasing especially with the likes of Volkswagen and Nissan
- Inventories in tier-I city has seen a higher churn as compared to the tier-II cities
- Profitability of dealers has been down 5-10% yoy
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