Tata Motors loses two top dealers to rivals
The second-largest automobile company of India, Tata Motors is experiencing a churn in its distribution network as the company’s rivals are following certain attractive appeals. Recently, two top dealers of Tata Motors were lured away by such rival companies which offered a little better margin to the dealers. Another reason behind these exits can be the slow sales of Fiat India whose products are sold in India in collaboration with Tata Motors. BU Bhandari Auto which is a Pune-based dealer had joined Tata Motors around a decade ago. At that time, with the launch of Tata Indica, the company had stepped into the passenger car market. The same dealer will now be working for Volkswagen, the German auto company.
Another example of one such dealership is of a Delhi-based, A-One. This dealership will now be servicing and distributing cars from the companies including BMW, Rolls Royce and Honda. Now the fact is that these dealers - A-One and BU Bhandari Auto, together contributed five to six percent of passenger car sales of Tata Motors, as per the industry sources. During the period from April to September, the company had sold 1.3 lakh units. One of the spokesman of the company confirmed that two dealers had left the company but he also added that in the past 3 years, only seven dealers have left.
Tata Motors spokesman said that in the past 6 months, the company has included 10 new dealers. This extended the dealership network of Tata Motors to 247. It is being said by the auto experts that Carl Peter Forster, the new CEO of the company is refurbishing the passenger car segment by including new dealerships so that more volumes can be pushed in the progressing auto market. One of the dealers said that the stangnant or slow sales from Fiat was also a reason. He added that the margins with their A-One business are much higher on their other dealerships. The sales of the Fiat cars have not come out the way it was expected, said a promoter. He further said that these sales declined 8% to 11,863 cars in the past six months.
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TATA needs to have a better relationship with their dealers and provide the necessary support from time to time. As such Tata market share is on the decline which itself is an area of concern. Fiat though a good product need to form independent channels of distribution and be free from TATA.