Organized Auto sector

Lately we have been hearing a lot about organized retail sector. But what does the word organized adds to the sector. Retail sector has been there from a very of  why this sudden need of organization? The dictionary meaning of organized is 'arranged according to a system or rules'. Before organization, retail could be called as a business but after organization it has become a sector. Organization has been a revolution for retail. The potential of retail was huge but by organization it has now got a structure. Today on the biggest companies on this planet are of retail. So, how this example of retail can help the automobile sector.

The auto sector currently is highly unorganized and fragmented. Lets understand this in a simple way. When someone wants to purchase a car or bike he/she has to visit different showrooms of different brands before finally making a choice. Same is the case with maintenance of the vehicle. Unless you want comprise with quality of service and spare parts, you will have to visit the authorized service center of the particular brand. All the finance is something you have to comprise on. Generally, every showroom or service has tie-up with one particular finance company and leaves very little option for us.

While talking about organized auto sector, I wish to see all or rather most automobile sales and services under one roof, as simple as that. Imagine a major showroom which would have 10 brand options for you, wouldn't it make life simpler. But this is possible only when the whole auto sector gets organized and strives towards customer friendly service. Unlike today's auto sector which is currently very dynamic, highly competitive and price sensitive. These reasons has caused some barriers in the growth of the sector, at least for some players with small market share.

Organizing the sector would bring in the sharing of infrastructure which would definitely bring down the running cost. Today's the running cost and revenue ratio will surely be beaten by huge margin in an organized sector. Service sector is something where organization is must needed. Currently the service is dominated by the authorized dealers which again  gives little choice to the customer. It also restricts his/her power on price negotiations. Unless the vehicle becomes a bit old, none of us risks it by giving to the  local mechanic, who may repair your vehicle better than authorized one. It is so, just because the local mechanic is not backed by the brand. This would be eliminated in organized sector.

Their are many issues/problems both noticed and unnoticed in the current automobile sector. I am not saying that organized sector will eliminate everything and become perfect but it will definitely provide a better environment. To conclude, the auto companies should open their minds towards an organized sector and promote initiatives taken towards it, because its the major companies who drive the sector and if the don't change their stance any other effort will not do any good. Thus its time for the companies to think beyond their balance sheets.    




Comments

Unknown said…
I think the bigger picture here is Aftersales Department which you are neglecting, Every OEM has their own technologies and systems in this department. Not to forget that it generates revenues for them.
Good idea though, but cannot be practically brought into existence, as you have'nt mentioned about CoO i.e Cost of Ownership of the vehicle to the customer which includes further many other factors such as Labour charge which depends on the ability of the technician to service /repair a car and is different from OEM to OEM cause of their individual training methodology, Customer Satisfaction and its value to OEMs, sharing of Technical Service information to Unauthorised Dealers(OEM does not share the Service Process information to the unauthorised dealers and precisely the reason why a new car owner would'nt risk his vehicle to be serviced at an unauthorised service station as it simply does not have the technology to repair/service a new car. saying this i completely disagree to your point that an local or an unauthorised service technician can repair/service a car better than authorised one), Service Processes of each individual OEM and why exactly due to these reason they cannot come under a single roof, Availabilty of Spare Parts and Logistics involved with respect to the Life Cycle of the Car/2 wheeler, etc.

To conclude, nowadays the auto industry is Customer driven and not sales driven, which is in favor to your topic, but the reality of this competitive market, most of which is from Western World adds restrictions to it becacuse when it goes Global...comes more stronger restrictions that supports your point. (I am talking about the BER and EURO regulations)

May 10, 2014 at 12:41 AM
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