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)

As part of its evolving global roadmap, French automotive major Renault Group is increasingly aligning its strategy around a select set of high-growth markets, with India emerging as a critical pillar for the company’s future competitiveness.

Senior leadership indicated that the carmaker now views India not merely as a domestic sales market but as a full-fledged industrial and sourcing hub capable of strengthening its global supply chain. With localisation levels already exceeding 90 percent, the company believes the Indian ecosystem can play a significant role in improving cost competitiveness and supporting exports to other regions.

To accelerate this transformation, the Group strengthened its leadership structure in the India by appointing a Stephane Deblaise as its first Chief Executive Officer (CEO) to oversee the entire India operation. The move reflects a broader intent to deepen local decision-making and integrate the market more closely into Renault’s global strategy.

India and South America drive future trade opportunities

The company is also exploring the potential benefits of free trade agreements (FTAs) that could further strengthen export flows from India and South America.

Executives indicated that improved trade frameworks could enhance the role of India as a competitive production and sourcing base, particularly as global automakers reassess supply chains and regional manufacturing footprints.

At the same time, the company remains cautious in other global markets. Chinese suppliers currently account for around five percent of Renault’s global sourcing, and the group has no plans to re-enter the Chinese market in the near term.

A key shift in the group’s strategy since 2019 has been a move away from aggressively chasing volumes toward building stronger brand value and profitability.

Instead of pushing for market share in every region, Renault says it is focusing on markets where it can build a sustainable and profitable business case. The emphasis is now on delivering differentiated products, stronger customer value and improved quality rather than simply expanding volumes.

This philosophy is shaping the company’s approach to India as well.

Rather than targeting the entire market, Renault plans to focus on specific customer segments, particularly middle- and upper-income families seeking value-driven mobility solutions. The company believes that strengthening product positioning and improving residual values will ultimately support stronger brand perception.

India’s passenger vehicle market remains highly competitive, especially in the price band of EUR 15,000–20,000 vehicles, where global and domestic manufacturers are battling for share.

Historically, Renault established its presence in the country through entry-level offerings such as the Renault Kwid. However, the company is now looking to shift its brand positioning toward higher-value products.

The success of the Renault Duster in the past continues to shape Renault’s product roadmap, with the company describing the nameplate as a brand in itself in several markets. Building on this equity, Renault plans to introduce new SUV offerings that combine stronger design, advanced technologies and multi-energy powertrain options.

One such upcoming concept is the Renault Bridger, which the company believes could be a game changer in its product portfolio. Designed around flexible powertrain architectures, the model is expected to support multiple energy options as part of Renault’s broader global push toward electrified and hybrid mobility solutions.

The company emphasised that it is not starting from scratch in India, pointing out that millions of customers already drive Renault vehicles across the country.

Another major focus area for the group is accelerating product development cycles.

According to Renault’s leadership, one of the biggest challenges facing the global automotive industry today is the ability to develop new vehicles in less than two years while keeping pace with rapidly evolving technologies.

The company has already demonstrated faster development cycles in China and is now working to replicate that agility in Europe by integrating engineers and suppliers more closely into the product development process.

This approach could also influence Renault’s India strategy, particularly as the company looks to launch new products more quickly and respond faster to market shifts.

Strengthening downstream ecosystem

Beyond manufacturing and product strategy, Renault is also placing increasing emphasis on downstream value creation, including dealership networks, customer services and vehicle residual values.

Management believes that stronger engagement with dealers and improved lifecycle value for customers will be critical differentiators in markets like India, where brand perception and resale value play a significant role in purchasing decisions.

The company currently maintains capital expenditure and R&D spending below eight percent of revenue, while maintaining tight control over inventory levels, which average around EUR 1 billion globally.

While Renault acknowledges that its current market share in India remains modest, the company sees substantial long-term potential in the country’s rapidly expanding passenger vehicle market.

With a renewed focus on SUVs, high localisation levels and a shift toward value-driven products, the French automaker believes it has a credible opportunity to rebuild momentum in the market.

For Renault, the strategy is clear: rather than chasing scale at any cost, the company intends to grow selectively and profitably, with India playing an increasingly central role in its global ambitions.

French automotive major Renault Group, which unveiled its mid-term business strategy ‘futuREady’, will see India playing a huge role in its ambitious growth plan.

Fabrice Cambolive, CEO, Renault Brand, has stated that the company’s upcoming Bridger SUV, slated to be a key driver for growth, will go into production by next year.

What’s more, the sub-4-metre tech-loaded Bridger SUV touted as the company's flagship for the international markets with a spacious 400-litre boot, will see India as its first market before being exported to other countries.

As part of its future plans, the Bridger SUV will be a multi-energy vehicle, which means petrol, electric vehicle and a hybrid engine to enable transition towards EV.

While full details of the product will be revealed closer to launch, the company has clearly stated that outside Europe, India, South America and South Korea are key growth regions.

The high-growth markets with an estimated 50 million units per annum, represent 60 percent of total industry volume growth where Renault Group is present.

French automotive major Renault Group has launched its new strategic roadmap, titled futuREady, marking the next phase of its corporate transformation following the 2021 ‘Renaulution’ plan. The strategy aims to establish the Group as a benchmark European carmaker through an offensive in products, technology and operational performance.

The Group has set medium-term financial targets including an operating margin between 5 percent and 7 percent and an average automotive free cash flow of at least EUR 1.5 billion per year.

Product Offensive and Global Growth

Renault Group plans to launch 36 new models globally by 2030. The strategy focuses on two distinct geographic tracks:

• Europe: 22 new models, of which 16 will be electric. The Renault brand aims for 100 percent electrified sales in this region by 2030.
• International: 14 new models targeted at growth hubs in India, South America, and South Korea. The Group expects 50 percent of Renault brand sales to come from outside Europe by the end of the decade.

A cornerstone of the plan is the RGEV Medium 2.0 electric platform. This modular 800-volt architecture is designed to reduce costs by 40 percent compared to current electric vehicles.

Technical specifications for the 2030 horizon include:

• Charging: Ultra-fast charging capability of 10 minutes.
• Range: Up to 750 km (WLTP) for pure electric versions and 1,400 km with a range extender.
• Software: Transition from Software Defined Vehicles (SDV) to Artificial Intelligence Defined Vehicles (AIDV), with 90 percent of functions updated via Firmware Over The Air (FOTA).
• Powertrain: A third-generation rare-earth-free motor (EESM) delivering 275 hp with 93 percent motorway efficiency.

Renault Group intends to halve factory downtime and reduce energy consumption by 25 percent through the use of an industrial metaverse – a digital twin of all manufacturing sites. The plan involves deploying 350 humanoid robots for low value-added tasks and using AI to supervise 1,000 manufacturing control points. These measures aim for a 20 percent reduction in production costs and a 30 percent reduction in logistics costs.

Francois Provost, CEO, Renault Group, said, “futuREady, our new strategic plan, is a crucial step in the future of Renault Group. In an environment that is even more competitive, we can build on solid fundamentals: our brands, our products and our financial results. Since my appointment as CEO last July, we have been working with the whole team worldwide to develop a plan that will set the Group on the path to robust and sustainable performance, whatever the challenges ahead.”

“Becoming Europe's reference carmaker means setting the ambition to design and produce in Europe products that are best in class in terms of desirability, technology and competitiveness. In an increasingly competitive environment, this means combining performance and innovation with resilience and robust strength,” added Provost.

RENAULT futuREady PLATFORM EXPLAINED
RGMP small	Modular platform, B & C segments
RGEV small	Electric platform, A & B segments
RGEV medium 1.0	Electric platform, C segment 1st generation
RGEV medium 2.0	Electric platform, C & D segments 2nd generation
RGMP medium	Modular platform, C&D segments
RGMP pick-up	Modular platform, pick-up
RGEV medium van	Electric platform, medium LCV
APP	Alpine platform
RGEA	Adaptation of the Geely GEA platform
RGEP	Multi-energy platform, entry level

Rolls-Royce Motor Cars has marked the conclusion of its year-long partnership with Aldingbourne Trust by presenting the charity with a series of exclusive artworks. These pieces were created by the luxury marque’s in-house design team and inspired by a wooden model gifted to Rolls-Royce by the Trust late last year.

That model, named the ‘Sapele Shadow’ after the wood used in its construction, was made by the Wood@Aldingbourne team as a gesture of gratitude when Rolls-Royce delivered its final donation. Now displayed at the company’s Goodwood headquarters, the handcrafted vehicle prompted one of the marque’s designers to reinterpret it digitally using the same advanced rendering software applied for client commissions.

Only three framed prints of this original artwork have been produced, each signed and numbered by the designer. One is set to be displayed in the Aldingbourne Trust café, another has been presented to the Wood@Aldingbourne workshop and the third will be auctioned to support the charity during the Goodwood Members’ Meeting in April.

Wood@Aldingbourne is one of over a dozen social enterprises run by the Trust, which has supported more than 1,500 individuals with learning and physical disabilities since its founding in 1978. Operating as a self-funding environmental group, it collects and repurposes reclaimed wood from local sources, including the Rolls-Royce site. All materials are either transformed into handmade goods for sale or used to fuel the Trust’s biomass boiler.

The relationship between Rolls-Royce and Aldingbourne Trust extended beyond fundraising throughout 2024, with colleagues contributing both time and resources. This ongoing collaboration reflects the meaningful connections formed when employees engage with their chosen House Charity, often resulting in support that endures well beyond the official partnership.

Andrew Ball, Head of Corporate Relations, Rolls-Royce Motor Cars, said, “It was a privilege to work with Aldingbourne Trust as our House Charity in 2024. When we presented the final donation cheque, we received an unexpected gift – a model car made in Sapele wood by the Wood@Aldingbourne team. This delightful model inspired one of our designers to create a unique digital rendering, just as we would for a real client commission. We’re delighted that this artwork will be displayed in the Trust’s café and will also be offered as a significant prize in a fundraising auction. It’s a pleasure to extend our support for this wonderful organisation beyond 2024.”

Abigail Rowe of Aldingbourne Trust said, “We were so appreciative of the fundraising efforts by Rolls-Royce staff, and the tremendous awareness we were able to generate through being their House Charity. It’s wonderful that the relationship has continued through this collaboration, which meant so much to the client who created the original wooden model, and will help raise further money for us. We’d like to thank the whole Rolls-Royce team, and particularly the talented designer who created these images for us.”