In today’s highly competitive auto market in India, most of the Global players have their presence. Every OEM want their dealers to improve their performance and grow every year and make adequate profits. Growth of the dealers means the OEM’s improve their market share and bottom line.
It is a myth that the car dealers earn very good margins in sale of cars/SUV. A car dealers’ gross margin comes from sales margin of car ( appx 2-3 % of car value ) and margins from other allied business like accessories sales, New Car Insurance and Insurance Renewal, Retail Finance, Extended Warranty, Loyalty Card among others.
In the very competitive automobile industry, every OEM (Original Equipment Manufacturer) is trying to woo the customers to increase their market share. “Customer is the king “and all the O.E’S and their dealer network” are working extra to reach to the new customers and also improve the customer retention.