FADA has recently asked SIAM to increase the dealer margin up to 7 per cent. The vehicle dealers around the country are facing huge losses due to the current situation.
India’s biggest car manufacturer Maruti Suzuki and MG Motor are the only two automakers in the mass segment which offers 5 per cent average fixed dealer margins. This margin is still short of 7 per cent of the retail price that the dealers have demanded from the carmakers. According to a recent survey by FADA (Federation of Automobile Dealers Association), the average fixed margin of a dealer in our country is quite low compared to the other countries like the US (8-10 per cent), China (9-11 per cent), 13-14 per cent in France, Belgium, Germany, Denmark, Italy and Spain, 12-14 per cent in South Africa and 6-8 per cent in the UK.
MG Motor India highest dealer margin comapred to other carmakers
Avg Dealer Margin
As per a recent study, among all the leading volume payers in the mass PV segment, on an average across all the cars, Maruti Suzuki India offers a fixed dealer margin of 5.07 per cent, Hyundai Motor India 4.38 per cent, Tata Motors 3.74 per cent, Mahindra 3.75 per cent, Honda 3.41 per cent, Toyota 2.32 per cent, Kia Motor 4.43 per cent and MG Motor 5.22 per cent.
Ashish Harsharaj Kale, FADA president told PTI, "We are at such a low level globally—and otherwise also—in India at 4% to 5%, if you look at the kind of input that a dealer puts in specially in the last four-five years,”
FADA President Ashish Harsharaj Kale told Press Trust of India. "Over time, profitability has come down. These (margins) were okay five years back (but not anymore).”
Moreover, FADA has recently written to SIAM (Society of Indian Automobile Manufacturers) to increase the fixed dealer margin up to 7 per cent of the selling price. The increase in dealer margin means that the automakers have to sacrifice their profit margin.