Tuesday, April 24, 2012
By Shilpa Chopra
Car dealers margin hiked up to amplify petrol car sales!
With the increase in the demand for diesel cars came up with a problem and decreased the demand for petrol cars. To amplify the sales of petrol cars, auto giants like Hyundai Motor India, Honda and Maruti Suzuki India has decided to hike the dealer’s margin (discounts and commission). According to a leading Maruti dealer in North Delhi, the petrol car stack up is increasing day by day. Previously there were some discounts from the dealers itself to consumers from their thin margin but now the hike in dealer’s commission is certainly a positive symptom.
If figures are taken into consideration, India’s largest auto maker used to pay about 4% of commission to its dealers. But with the tumbling sales of petrol cars, Maruti has pushed up this percentage of a decent 10%. However, no modifications have been made in the commission on diesel cars.
If the current statistics of MSI are taken into account, 80% of the sales are grabbed by diesel cars and the major reason behind this is the sky rocketing petrol prices. The market share of Maruti India in the passenger car market has dipped down to near about 40% while the diesel cars have exceeded since December 2011. Other auto manufacturers like Hyundai have also increased the dealer margin to about 8% to strengthen its petrol car sales. Tata Motors and General Motors have also hiked the dealer commission by about 2%.
Cutting down the interest rates along with amplifying the dealer’s margin will certainly support the declining sales of petrol cars since last 2 years in the Indian auto market.