FADA India says that by sharing retail numbers the auto industry will be able to bring in transparency into the system. This will also help them better predict the industry’s performance.
FADA India president Vinkesh Gulati says that things won’t change overnight, but hopes it happens soon
The Federation of Automobile Dealers Association (FADA) has asked Indian auto manufacturers to push out monthly retail sales figures instead of the wholesale numbers, which are currently being shared. Voicing the need for transparency in the segment in the latest episode of Freewheeling with SVP, Vinkesh Gulati, the newly appointed president of FADA India said, “When he (a dealer) sells the vehicle and the vehicle gets registered, that’s the actual sale. And world over, this is the way comparison is done. This is the way people find how the industry is going up or down. And that is the process.”
Currently, all auto manufactures in India share their monthly wholesales figures, which are essentially the total number of vehicles manufactured and shipped to dealerships across India. As wholesale numbers are very different compared to the actual retail sales, FADA says that it becomes difficult to predict the industry’s performance, especially amidst testing times like last years’ slowdown and the ongoing pandemic. Gulati said, “Practically, the government gets its GST when we sell the vehicle to the customer, or else it’s just a GST output to GST input. And practically, the state gets the road tax when we sell to the end customer. So basically, these are all figures from a manufacturer to a wholesaler to a retailer and then to a counter.”
FADA has also been advocating the need to upgrade Auto OEM’s market share calculations on basis of actual registrations from November 2018. The apex retail body says that this is a globally followed norm and it should be implemented for the betterment of the Indian Auto Industry. Many of its members have also done the same with their respective OEM’s and have received a positive response of accepting it if it becomes an industry practice.
Talking about his expectation on the adaptation of this much-needed practice, Vinkesh Gulati added, “Obviously, it has been in the market for many years. FADA is wanting to put in transparency into the system and you cannot change overnight the thinking mentality of people which has been there for around 10-20 years. Maybe in another year or so, they will slowly and steadily accept the actual figure, and this should be that thing going on.”