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)

Eicher Motors (EML), a leading manufacturer of two-wheelers and commercial vehicles, has reported financial results for Q1 FY2027, recording a 32 percent YoY increase in quarterly operational revenue to INR 66.32 billion.

The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 32 percent YoY to INR 15.91 billion from INR 12.03 billion in Q1 FY26; consolidated net profit grew 21 percent YoY to INR 14.63 billion from INR 12.05 billion a year ago.

Alongside the financial results, Eicher Motors's board of directors approved an investment of INR 12.25 billion for Phase I of a greenfield manufacturing plant in Tada, Andhra Pradesh. The facility is scheduled for completion during FY 2029-30 and will provide additional annual production capacity of up to 450,000 motorcycles at full utilisation.

During Q1, Royal Enfield recorded quarterly motorcycle sales of 332,940 units, representing a 27.4 percent increase from 261,326 units. Operational milestones during the period included the start of deliveries for the Flying Flea C6 electric motorcycle and the launch of the Bullet on the 650cc engine platform.

On the other hand, VE Commercial Vehicles (VECV) reported revenue from operations of INR 66.10 billion, up 16.6 percent from INR 56.71 billion a year ago. VECV's EBITDA rose 6.1 percent to INR 5.41 billion from INR 5.11 billion, while net profit reached INR 3 billion compared with INR 2 billion last year. The company sold a total of 24,815 commercial vehicles, up 14.8 percent YoY, as compared to 21,610 units a year ago.

B Govindarajan, Managing Director, Eicher Motors and Chief Executive Officer, Royal Enfield, said, "Building on a record-setting performance in FY26, we have sustained our strong momentum into the new financial year, with Royal Enfield recording its highest-ever quarterly sales and VECV recording its highest-ever Q1 sales. This quarter was historic for Royal Enfield as we commenced deliveries of the Flying Flea C6 electric motorcycle. The early response to the FF.C6 has been highly positive, reinforcing our vision of creating a new category of premium city+ electric mobility. We also strengthened our portfolio with the launch of the iconic Bullet on the 650cc platform. Globally, key markets continued to perform well, driven by new motorcycle launches. To support our growth over the long-term, we announced plans for a new greenfield manufacturing facility in Tada, Andhra Pradesh, to expand our capacity beyond the existing facilities in Tamil Nadu. Beyond these milestones, our global community remained at the heart of our journey, which was reflected in the growing participation numbers in our marquee rides and events. With a robust product launch calendar and diverse brand initiatives planned for the rest of the year, we are optimistic of maintaining our growth trajectory in the dynamic global environment."

B Srinivas, Managing Director and CEO, VECV, said, "We are pleased to have delivered our best-ever first quarter, with sales of 24,815 units, growing 14.8 percent YoY, while maintaining our number one position in the LMD truck market. Beyond the numbers, we continued to drive modernization in the Indian CV sector. The launch of the Volvo FMX Edge is set to transform mining productivity by combining optimized payload capability with superior safety, uptime and lifecycle value. Furthering our commitment to deliver superior uptime to Eicher customers, we added 30 new touchpoints during the quarter. We also signed a MoU with the Ministry of Road Transport and Highways under the PARIVARTAN fleet modernisation scheme for the NCR, signalling our partnership to support the transition towards a cleaner and more efficient commercial vehicle fleet. As we look ahead, we remain focused on building on this momentum and delivering sustained value for our customers in a rapidly evolving industry."

KPMG, one of the leading accounting firms, has launched The KPMG Global Tech Report 2026: Automotive, which indicates that global automotive organisations are directing investments towards artificial intelligence (AI), data resilience and digital infrastructure to adapt to evolving mobility ecosystems.

The report surveyed 258 technology executives across 22 countries, representing original equipment manufacturers (OEMs), commercial vehicle manufacturers, Tier 1 suppliers, technology component vendors, and mobility providers with annual revenues exceeding USD 1 billion.

The survey metrics show that 88 percent of respondents express confidence in revenue growth over the next 24 months. Furthermore, 74 percent view advanced technology as the primary driver of competitive advantage, whilst 86 percent state that technology roadmaps become outdated quickly due to market changes. Additionally, 82 percent of executives report a requirement to take risks on technology investments, though 53 percent note that legacy processes reduce return on investment.

Confidence in revenue growth over next 24 months	88%
View advanced tech as main competitive driver	74%
Acknowledge rapid obsolescence of tech plans	86%
Feel requirement to take higher risks on technology	82%
Cite legacy process issues reducing ROI	53%

To address macroeconomic and geopolitical volatility, sub-sectors within the industry report distinct technical responses. Among vehicle manufacturers, 67 percent plan to enhance data sovereignty across partnership networks. Among truck manufacturers, 61 percent intend to hire onshore technology talent. Tier 1 suppliers report that 41 percent aim to upgrade data infrastructure for scenario planning, while 47 percent of component suppliers plan to tighten technology expenditure. Among mobility service providers, 40 percent plan to expand the number of innovation centres of excellence.

In India, automotive firms are focusing on transitioning AI implementations from pilot stages to operational deployment across engineering, manufacturing, supply chain management and customer operations.

Jeffry Jacob, Partner and National Sector Leader, Automotive, KPMG in India, said, "For India’s automotive sector, the findings reinforce that competitiveness will increasingly depend on how effectively organisations scale AI, data and digital technologies. These capabilities must move beyond pilots and into engineering, manufacturing, supply chains and customer-facing operations. Strong data foundations, clear governance and disciplined execution will be essential to convert technology investments into measurable value. As vehicles become more connected, software-enabled and intelligent, resilient digital capabilities will be critical to sustaining growth and remaining competitive in the Intelligent Age."

The report concludes that industrialising machine learning operations (MLOps), enforcing data governance and implementing standardised digital architectures remain key operational priorities for sector participants aiming to manage software updates, cybersecurity and regulatory compliance.

European automaker Stellantis has signed an agreement with private equity firm Mutares SE & Co. to sell its entire shareholding in the Free2move car-sharing business. The transaction is expected to close by the end of 2026, subject to regulatory approvals and employee consultation processes.

Free2move operates free-floating short- and long-term car-sharing services across 14 cities in Europe and the United States via a mobile application platform. Following the acquisition, Mutares plans to establish the business as an independent mobility entity, focusing on fleet management, transitioning to battery-electric vehicles and operational adjustments for municipal transport requirements.

The divestment aligns with Stellantis' capital allocation strategy under its FaSTLAne 2030 business plan, which prioritises resource allocation towards core automotive operations and high-return technologies.

Virgilio Cerutti, Head of Business Development & Partnerships at Stellantis, said, “By sharpening our focus on core automotive activities, we strengthen our capacity to deliver long-term performance. We are committed to working closely with all stakeholders to support a smooth transition process for customers, partners, and employees.”

Johannes Laumann, Chief Investment Officer, Mutares, added, “Free2move’s car-sharing business combines a strong, internationally recognised brand with clear potential for operational improvement following an intended carve-out from Stellantis. Together with the management team, we look forward to strengthening Free2move’s operating model and further developing the company into an independent leading platform in the mobility sector.”

ZF Commercial Vehicle Control Systems India Limited (ZF CVCS India) has finalised multi-year supply agreements with three major Indian truck manufacturers for its ESCsmart Electronic Stability Control (ESC) solution. The deals cover 12-volt and 24-volt architectures and are tied to new model launches developed to align with upcoming safety legislation. Local assembly will occur at ZF CVCS India's domestic production hubs, with series manufacturing scheduled to start in the third quarter of 2027.

The regulatory landscape is the primary driver, as Indian authorities have set an October 2027 deadline for mandatory ESC installation on all trucks. With that compliance date approaching, OEMs are securing proven technology partners well in advance, and the nominations reflect a broader industry shift towards active safety adoption ahead of the mandate.

Electronic stability control is globally regarded as a critical tool for preventing rollovers and loss-of-control incidents, with many developed markets already enforcing similar requirements. India's forthcoming regulations represent a meaningful convergence with international norms, and observers anticipate measurable improvements in commercial vehicle accident statistics once the technology becomes standard.

The ESCsmart system is tailored for heavy commercial use, automatically modulating braking and engine torque when sensors detect instability. Its effectiveness in Indian conditions has been validated through deployments on over 60,000 vehicles, while ZF's pedigree includes 20 years of innovation and more than three million global deliveries. The company is providing validation and pre-certification support, positioning the solution as fully compliant with both current and stricter 2027 rules.

Paramjit Singh Chadha, Managing Director, ZF Commercial Vehicle Control Systems India Ltd, said, “As the Indian commercial vehicle industry prepares for the next phase of safety regulations, vehicle stability technologies are evolving from being a differentiator to becoming a fundamental requirement. These business nominations reflect the growing momentum towards advanced active safety systems across the market. With a proven ESC platform, dedicated validation capabilities at our ESC test track and strong local engineering and manufacturing expertise, ZF CVCS India is ready to support OEMs in meeting the upcoming safety requirements with scalable, India-ready solutions.”

Akash Passey, Non-Executive Chairman, ZF Commercial Vehicle Control Systems India Ltd and President – ZF Group in India, said, “We are proud of the confidence our customers have placed in ZF CVCS India and the partnerships we have built. As India enters a defining phase in commercial vehicle safety, OEMs are increasingly prioritising proven technologies that enhance vehicle stability and deliver meaningful safety outcomes at scale. These nominations reinforce ZF CVCS India's leadership in active safety and our readiness to support the industry's transition through proven technology, local manufacturing, advanced validation capabilities and ZF's global expertise in electronic stability control.”