Dealers want State govts to set up special auto zones

The Federation of Automobile Dealers Associations (FADA), the apex body representing over 7,000 dealers across the country, said on Friday that it is in favour of State governments creating special auto zones in select cities, as is the practice in some countries in the West.

The FADA President, Mr Nikunj Sanghi, said the association is engaged in dialogue with State governments encouraging them to set up auto zones. The idea is to provide all services at one place across automotive companies, including sales, service and registration. This move is expected to decongest city dealerships and improve customer service.

Speaking at Hyderabad International Auto Show being hosted at HICC here, Mr Sanghi said that the country's automotive sector which now faces a tough business environment is likely to see the slow growth phase to continue for another 12-18 months.

However, he felt that the Indian automotive market is still amongst the fastest growing globally. If economic growth tops 7-8 per cent per annum, we are confident that the country's automotive market, which is predominantly small-car driven, will also grow, Mr Sanghi said.
Higher expectations

He said that the customers' expectations are going up, pushing manufacturers to innovate and offer products that meet their expectations. After a robust growth for couple of years, the automotive market has been passing through a tough phase due to general economic slowdown, high inflation and high interest rates.

With over 70 per cent car buyers taking the loan route, the high interest rates are hurting, he felt.

Given the current business environment, including high interest rate regime, the automotive sector may not see much growth, he said.

The Government move to levy cess on diesel cars is a retrograde step, he said.