Except one previous month sales
results, auto industry in last 3 years have experienced a huge fell in
sales and though profitability. The companies are pitted slower sales
and lower margin continuously. Buyer’s sentiment went all time low in
past decade and almost each company had to face declining sales problem.
Few companies tried kept its sale in line by introducing new models.
A study by Frost and Sullivan on behalf
of Federation of Automobile Dealers Association found that “Sales
volumes per manufacturer have declined by 8.6 per cent in the span of
last three years; this trend of declining sales per manufacturer has
been observed for the first time in last decade.”
The study aimed at presenting
competitive analysis of best OEM practice for passenger vehicle retail
in the country that gives possible recommendation for improvement for
future business sustainability. The report says that new dealer in the
industry found more difficulties to establish because lower margin and
low sale kept them away from the breakeven point. It indicates overall
revenue of dealers declined or improved marginally within previous two
years.
On other hand, they also faced depressed
profit margin because of increase in interest payments, rentals,
manpower wage and huge marketing costs. So profit margin became too much
stretched during this period.
While for the dealers who are well
established and owns their own showroom premise successfully withstand
the situation. They were able to maintain fluency of business somewhat
better than those of new entrance.
But keeping these all things aside, let
us hope of positive numbers which has already given the glimpse of
changing trend in previous month sales results.
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