Q: Congratulations on assuming the charge of the President of FADA. What are your immediate priorities?

Gulati: Thank you!

The past eight to nine months have been a challenging time for the entire humanity and every business sector. It has been a difficult phase for the dealer fraternity too. We have worked in very adverse conditions with zero business and zero earnings, along with a high operational cost. Post reopening of dealerships, proper decontamination and sanitisation of the entire premises, vehicles, employees, etc., have added cost to dealers who were already seeing slow sales for over 18 months in the pre-COVID era.

We are a resilient lot, and COVID has taught us to make tough decisions to ensure that our business and community survive, while offering the best of our services to customers. During my tenure, I will rigorously take up all our dealer issues at every possible platform and offer the association the finest representation, better visibility and hearing, offering a competitive business and operational environment to our fraternity.

The automobile industry has been an important driving force in India’s economic growth. Reviving the automobile industry is vital to regain lost momentum in the economy. The Government and the sector need to work together to strengthen the industry, wherein the dealer fraternity is an important element in the system.

One of the key issues which we will be working upon is improving dealer margins. Over the years, profitability has dwindled due to high costs and low operating margins.

Auto dealerships in India are operating at an average net profit level of 0.5 percent to one percent of the total turnover, which is much lower than the global standard, as internationally, dealer margins range from seven percent to 12 percent on selling price of the vehicle.

We have already written to SIAM about this, and we will further strongly urge all our OEMs to make the dealer business more sustainable and shockproof.

While we were trying to bring auto dealers under the ambit of MSME, we will up the ante further and make sure that dealers are treated at par with other businesses who are reaping the benefits of being an MSME.

Further, as a category, 2-wheelers comprise 75 percent of the sales in India, and I am working to make an exclusive 2-wheeler vertical at FADA.

This will specifically work on the nuances of 2-wheeler dealership such as sub-dealers, brokers etc. The dynamics of 2-wheeler dealers are very different from 4-wheeler dealers and hence need special attention. As they say, fortune is at the bottom of the pyramid!

FADA will continue to take up issues concerning regulatory and legislative burdens, representing the dealer fraternity across every possible platform. We will continue to reach out to our principals and build strong relationships moving ahead.

Q: FADA has been working on increasing dealer margins for ages but ends up in a stalemate. Where is the issue? How are you going to tackle this?

Gulati: Yes, this is one issue which we have been working for many years, but efforts were not made concretely until sometimes back. It’s during the 2nd Auto Retail Conclave, when we brought up the issue to our executive committee, had a panel discussion exclusively on dealer margins. There onwards, we started building momentum with continues efforts in this direction, and a few months back we also did a study on dealer margin offered by individual OEM to their respective dealers across the product lineup. This was an eye-opener for the entire fraternity as nothing of this sort was brought out in the past; this showcased that Indian dealer’s community were working on a minimal margin which was way below the global standards.

I am happy to mention that post this study, few OEMs have reviewed their dealer margin, few are in discussion with their management and respective dealer council. However, the increased margins are still not at a level which we have been asking for, but a movement has started, which is quite encouraging for the entire community.

Dealership business has a significant daily expense which is addressed by the dealer from his marginal profit. A better profit margin will help the dealer to re-invest a subsequent amount of his earning for the development and expansion of his business, which in return will add up a new business to OEMs.

We will continue to do this kind of studies in times to come and also keep negotiating with our principals as they also understand that their first customers are not in good shape and they require higher margins to sustain their business.

Q: What according to you are the skill gaps persist in the automotive industry still and how FADA is addressing this?

Gulati: Skill gap is a subject which is never-ending as technology keep changing, and we need to make a continuous effort to upgrade our manpower. In recent time, the automobile industry has gone a long way in terms of technology upgrade.

To address this change, all the three auto Associations (Automotive Component Manufacturers Association of India (ACMA), Federation of Indian Automobile Dealer Associations (FADA) and Society of Indian Automobile Manufacturers (SIAM)) have come together in tune with National Skill Development Council and created ASDC (Automotive Skill Development Council) which looks to reduce the gap in between yesterday’s skills and today’s requirement. FADA has been making a continues effort to keep our dealership manpower at par with the newer technologies.

At FADA, we are starting up with a FADA Academy which will hold courses for Dealer Principals and their Chief Experience Officers to train them in running an efficient dealership business from all aspects.

Q: With more than 50 percent of the work in purchasing any vehicle done online, where do you see the role of dealers in the future? Do you see the new trend fuelling unemployment further?

Gulati: Getting prospective customers through the online route is a growing trend. Dealers and manufacturers have been active on online platforms for quite a long time now. The pandemic is the reason for this change in consumer behaviour. Earlier, customers had to visit dealerships several times before the final buy. e.g. all loan formalities, document verification, vehicle test drive etc. These are now offered online or at the doorstep. But for the final sale, customers have to visit the dealerships to test the vehicle and take delivery.

Today every customer is well informed. The vehicle-buying experience involves several steps, right from an online search, specific automobile website visits, going through views, reviews, product comparison, collecting information from peers, social media and users and evaluating a brand, product and its services.

Only after doing all these research consumers make their decision. It is not just a transaction for the customer, but more about in getting into a relationship of trust. That is where the dealerships come into play. Every customer wants to experience the vehicle physically before closing the deal. More importantly, they want to meet up face-to-face with the dealer and satisfy themselves before committing to this high-ticket purchase.

I don’t think there is any change in the playbook, but digital has now moved from “Nice to have” to Necessity. In this COVID era, with total lockdown, digital marketing has played a significant role in boosting sales and smooth execution. Every dealership has initiated digital training of its manpower, equipping them to conduct sales coordination through a digital platform. This initiative has further enhanced its sales and service reach. Dealerships must be the most frugal and flexible link across the automobile network.

Dealers and dealerships have always been the face of the brand and will continue to be so. I don’t see any immediate challenge or threat to the dealership business. However, with companies being more aggressive and active on online platforms, this will add on to dealership engagement with the brand and the customers, helping them further to enhance their sales and service reach and experience.

Q: What are the challenges you face with emerging technology trends like vehicle electrification?

Gulati: I don’t see vehicle electrification as a challenge for the dealer fraternity. The dealer community has been one of the most adaptable segments of the automobile ecosystem. We have always strived to keep ourselves at par with the manufacturers, and it’s business requirement, product and services utility. The dealer business is one business which significantly depends on its skilled workforce across the offerings such as sales, aftersales, engineering, etc. With every new product or technology, the dealer in association with its OEM partner makes certain that it initiates rigorous training for its employees so that it can offer the best service to its customers on behalf of the brand.

As far as vehicle electrification is concerned, India is still at a very initial level as electric PVs still have less than 0.25 percent market share. The EV segment requires immense Government support in terms of infrastructure, subsidy, allowance, recognition, etc., to get the segment to grow. I don’t want to comment on the technicalities of the segment and its products and services. Instead, on behalf of the entire dealer fraternity, I would like to assure that as a community we are committed to offering all necessary support and service to the Government for its vision about the EV industry.

Q: Episodes like FIAT & Peugeot (decades ago) and GM & MAN Trucks (in the recent past) etc., exiting the Indian market continues, leading the dealerships to lurch. What kind of safeguard mechanisms can we have to support the dealer community?

Gulati: Setting up a global brand dealership in India is a massive cost which varies from brands to segment, size of the dealership, region, location, etc. On an average setting up a premium 2-wheeler brand dealership cost somewhere around INR8-10 crore whereas setting up a premium 4-wheeler brand requires close to INR 20 - 30 crore. It is not just the setting up of a dealership which is a cost, the operation of a dealership is also a huge which involves day to day operational cost, vehicle stocking, employee salary etc. The dealer bears all this. As you know, the dealership business operates on a very minimal profit margin; any such activity by any brand ends up leading to capital loss along with loss of jobs in the sector. And now the pandemic poses another challenge for the dealer fraternity.

For example, the recent announcement by Harley-Davidson to discontinue its manufacturing and sales operations in India has left its Indian dealers stranded. This will result in the closure of 35 Harley-Davidson dealerships, with an approximate capital loss of INR 110-130 crores, besides also leading to a job loss of around 1,800-2,000 people at dealerships.

This is the fourth instance of automobile companies exiting India in the last three years (since 2017). Earlier, General Motors, MAN Truck and UM Lohia had quit their Indian operations, leaving their dealers in a similar fix. Due to FADA’s strong intervention and the Indian Government’s full-fledged support, General Motors and MAN Trucks had partially compensated their channel partners, but the UML matter remains unresolved till date.

Had there been a Franchise Protection Act in India, brands like these would not have abruptly closed their operations, leaving their channel partners and customers in the lurch.

We are already working on a draft with our legal team and have initiated communication with other retail associations to bring the Franchise law in India, which will support the dealer fraternity in the dire situation of an exit or termination.

We would also request the Government to initiate the law on priority as this law will help level the playing field for large international and domestic automakers and dealers and also help in regulating over-dealerisation.

Q: What kind of support/guidance FADA has given to its members to tide over the current situation triggered by the pandemic?

Gulati: These are unprecedented times. Everybody is making the best efforts to emerge from it in their own way. The auto dealership is one such business which was deeply impacted by COVID-19. The auto dealership is a very marginal profit business, and we do not have large funds like car and component manufacturers have, which makes it more difficult for us to emerge from this difficult time. The industry was already struggling with a 15 to 16-month slowdown, and the lockdown has pushed the entire industry further back.

FADA has provided all possible and necessary help to its dealer members. At the time of the lockdown, FADA wrote a letter to Prime Minister Narendra Modi to apprise him about the dealers’ issues and suggesting dealership survival and demand revival initiatives. Apart from this, FADA wrote a letter to SIAM making them aware of the situation of the dealers, requesting them to review the dealer margin and extend their support so that dealer can survive these difficult times. FADA quite actively worked to protect dealers from the loss on remaining stocks of BS-IV vehicles from the ban on the sale. The association petitioned the Supreme Court to extend the dateline for sale of these vehicles. At the same time, while securing the future of dealers, FADA demanded that car makers increase the dealer margin to five percent PBT and reduce the infrastructure cost by 25 percent.

FADA conducted online training for its dealer brothers, training them to prepare for maximum work with limited resources. (MT)

European automotive group Stellantis has announced an investment of approximately INR 40 billion (EUR 400 million) to scale its Indian operations under its FaSTLAne 2030 strategy. The commitment brings the manufacturer's cumulative capital deployment in India to INR 150 billion by 2030.

The roadmap outlines 12 vehicle introductions over the next three years across its Jeep and Citroen brands, comprising 7 new models and 5 major product upgrades. The releases will span the B, C and D SUV segments, alongside a multi-purpose vehicle, an A-segment car and a pickup truck.

The initial product under the expanded plan is scheduled for commercial launch in Q2 of 2027. Powertrain options will include internal combustion engines, hybrid, plug-in hybrid and battery-electric platforms, supported by a target local component sourcing level of 90 percent across its manufacturing plants in Ranjangaon, Thiruvallur and Hosur.

Tianshu Xin, COO, Stellantis Asia-Pacific Region, said, "India has a dual role for Stellantis: it is an important market that we intend to grow in, and an increasingly significant capability base for the region and the wider Group. India is a long-term commitment for us, not just a volume chase. Under FaSTLAne 2030, our region-led model gives the India team greater ownership of decisions, and the roadmap we are announcing today reflects our long-term conviction in this market. A stronger product cadence, a multi-energy technology approach and India’s capabilities across manufacturing, engineering, software and sourcing give us the foundation to build a larger and more competitive business here through 2030."

Shailesh Hazela, CEO & MD, Stellantis India, said, "Our commitment to India will be measured by what we put on the road. Having built a strong foundation over the years, our focus now shifts to scaling the business. Twelve launches across Jeep and Citroën over the next three years will significantly broaden our market participation and give Indian customers more choice across segments and powertrains, supported by deeper localisation and a stronger sales and service network. With fresh investment of approximately ₹5,000 crore, we are building greater scale, relevance and competitiveness in this market, while strengthening India’s role in Stellantis’ global operations."

The investment phase expands on the INR 110 billion previously deployed by Stellantis in India for manufacturing facilities, software development centres in Bengaluru, ICT hubs in Hyderabad and regional component export channels.

The Society of Indian Automobile Manufacturers, the apex body representing automakers across segments in the country, has released the wholesales data for Q2 FY2027, which saw record performance across passenger vehicles, commercial vehicles, three-wheelers and two-wheelers.

In Q2 FY2027, the passenger vehicle segment domestic sales reached 1.36 million units, up 30.7 percent YoY. Sports Utility Vehicles (SUVs) accounted for 68 percent of total passenger vehicle sales, recording a growth of 34.2 percent, while passenger car sales increased by 24.9 percent. Passenger vehicle exports declined by 5.2 percent to 229,087 units, impacted by logistics constraints in West Asia and higher baseline comparison figures.

The two-wheeler segment posted domestic sales of 6.43 million units, registering a growth of 15.2 percent YoY. Scooter sales increased by 27.7 percent, while motorcycle sales rose by 7.4 percent. Two-wheeler exports reached a record Q2 total of 1.65 million units, marking an increase of 27.7 percent over the same period last year.

In the three-wheeler category, domestic sales grew by 23.6 percent to 285,342 units, driven by demand for cargo configurations and electric L5 vehicles. Three-wheeler exports reached a record Q2 total of 161,060 units, representing a 30.4 percent increase. The commercial vehicle segment recorded domestic sales of 309,063 units, marking a growth of 28.7 percent, while commercial vehicle exports rose by 72.5 percent to exceed 41,416 units, supported by infrastructure spending and fleet replacement demand.

Shenu Agarwal, President, SIAM, said, "The Indian automotive industry delivered a strong performance in the first half of FY2026-27, following a robust second quarter and a strong September 2026. This stellar performance across all segments of the automobile industry has been supported by improved affordability following GST 2.0, resilient rural and urban demand, healthy freight movement, infrastructure-led economic activity, and a gradual replacement cycle across vehicle segments. The electric vehicle ecosystem also continues to mature with multiple offerings, improving charging infrastructure and supportive policy measures. At the same time, alternative fuel technologies are witnessing increasing acceptance and are expected to play an important role in India's sustainable mobility transition. Industry looks forward to the festive season for the continued momentum while remaining cautiously optimistic due to prevailing geo-economic uncertainties. Continued investments in infrastructure, sustained economic growth, and rising adoption of cleaner and more efficient mobility solutions are expected to support industry growth through the second half of 2026-27."

FADA Academy, in collaboration with the Automotive Skills Development Council (ASDC), has inaugurated its first joint skill development centre in Agra.

Located within the dealership facilities of Ashok Auto Sales and Manoram Bajaj Group, the Autograd Regional Skill Development Centre establishes a training framework situated directly inside automotive retail operations.

The facility aims to address workforce gaps in automotive retail by providing candidates with training matched to dealership job roles. The initial cohort at the centre consists of candidates undergoing instruction for the Service Advisor role, supported by participating dealerships representing brands including Bajaj Auto, TVS Motor Co, India Yamaha Motor and Tata Motors.

C S Vigneshwar, Chairman of FADA Academy & Research, said, "FADA Academy is committed to strengthening the capabilities of India's automotive retail workforce through industry-relevant education and training. The establishment of our first joint training centre with ASDC at Agra is an important milestone in this journey. By bringing training into the dealership environment, we can create a stronger connection between learning and actual workplace requirements. Our vision is to create local employment opportunities, support the talent requirements of dealerships and provide aspiring professionals with a foundation for long-term career progression within the automotive sector. We also want to ensure that candidates are not merely trained to secure a job, but are equipped to perform with confidence, deliver value to their employers and build long-term careers in the automotive industry. We hope this initiative will serve as a replicable model for dealership-led skill development across the country. The automotive sector is evolving rapidly, driven by new technologies, changing customer expectations and increasingly sophisticated dealership operations. This makes industry-aligned skill development more important than ever. The FADA Academy–ASDC joint training centre at Agra is a progressive initiative that brings structured training closer to the workplace and enables candidates to develop competencies relevant to their designated job roles."

The inauguration event was attended by Union Minister of State Prof. S. P. Singh Baghel, ASDC Chief Executive Officer Prasanna Pahade, FADA Uttar Pradesh Chairperson Sandeep Narain and leadership representatives from local dealer groups. The initiative forms part of a broader framework intended to be replicated across other regions to train dealership personnel.

Larsen & Toubro (L&T) has signed a Memorandum of Understanding with TuTr Hyperloop, an IIT Madras-incubated deep-tech startup, to develop and deploy next-generation mobility infrastructure in India.

The agreement creates a framework for L&T and TuTr Hyperloop to collaborate on Linear Induction Motor-based propulsion systems, vacuum tube structures, pressure management systems, civil engineering works, electrical infrastructure, signalling and telecommunications integration.

Project-specific agreements will follow to define execution terms across freight logistics, port connectivity and industrial transit applications. The technical roadmap aims to progress from linear induction systems toward magnetic levitation and vacuum-based transportation networks.

The partnership combines L&T's engineering, procurement and construction capabilities with TuTr Hyperloop's electromagnetic propulsion research to assess commercial viability, conduct technical feasibility studies and engage prospective customers for hyperloop transit projects in India.

S V Desai, Whole-Time Director and Senior Executive VP of Infrastructure, L&T, said, "Hyperloop represents an exciting frontier in next-generation mobility, with the potential to redefine the movement of people and goods. Its innovative propulsion technology and low-friction environment enable faster transit, improved logistics efficiency, reduced energy consumption and lower emissions. Translating such technological innovation into practical deployment requires robust engineering, scalable infrastructure and close collaboration across the ecosystem. Our partnership with TuTr Hyperloop is a step in that direction."

Prof. Satya Chakravarthy, Professor, IIT Madras, said, "The transition of advanced mobility technologies from research and development to real-world deployment requires strong collaboration between academia, technology developers and industry. This partnership between TuTr Hyperloop and L&T brings together complementary strengths that can help address the engineering and infrastructure challenges involved in scaling next-generation transportation systems. It is an encouraging step towards translating indigenous innovation into practical, deployable solutions for India."

Dr Aravind S Bharadwaj, Co-Founder and CEO, TuTr Hyperloop, said, "At TuTr Hyperloop, our focus is on developing indigenous mobility technologies that can address real-world transportation and logistics challenges. Our collaboration with L&T brings together our capabilities in electromagnetic propulsion, advanced mobility systems and technology development with L&T’s extensive engineering and infrastructure execution expertise. Together, we aim to work on commercialisation these technologies."