sewells msxi adci report oct-dec 2016 edition

Download Sewells MSXI ADCI Report Oct-Dec 2016 Edition

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  • adciAutomotive Dealer Confi dence Index

    11th Edition, Oct - Dec 2016

    adci

    SHAPING THE FUTURE OF AUTOMOTIVE RETAIL.

  • www.sewells-msxi.com

    TThe Indian automobile industry has had an exciting year in 2016. The industry started with a strong growth with new model launches by manufacturers aided by reduction in interest rates, roll-out of seventh pay commission and growth in rural demand.While the industry was expected to end the year with a strong growth trajectory currency demone-tization put brakes to its growth in the last quarter.In the new year, we are past the demonetization battle, and looking forward to the growth trajec-tory that we are used to. However our recent ADCI survey conducted during Nov Dec indicates that the Dealer Confi dence Index is down a few notches from the pre-festival season.

    The truth is that the Indian automotive industry is here for the long haul and such distractions may be temporary. However it is equally important to understand the feelings in the short run. This report aims to capture and quantify the sentiment of the channel partners during the Oct - Dec quarter.

    This report aims to capture and quantify the sentiment of various industry stakeholders to be viewed as reliable presursors to business performance. Hope you would enjoy reading through the pages of the eleventh edition of this report.

    About Sewells MSXIAutomotive Dealer Confi denceIndex

    ADCI Survey Methodology Summary of Respondents

    SEWELLS MSXI

    AUTOMOTIVEDEALERCONFIDENCEINDEX

    1

  • www.sewells-msxi.com

    About Sewells MSXIAutomotive Dealer Confi denceIndex

    A In the automotive industry, dealers enjoy a unique position which keeps them close to the customers. They are also in constant touch with factory sta , other dealers, fi nanciers and market intermediaries. Consequently, each dealer has exposure to a plethora of information that in turn shapes his/her views about the future of their business in short and medium term.

    The Sewells MSXI Automotive Dealer Confi dence Index (ADCI) report captures and quantifi es this sentiment across the length and breadth of the country. The movement of this collective sentiment in the form of an index indicates the direction of the wholesale and the retail sales in the industry. It is published by Sewells MSXI on a quarterly basis.You have the eleventh edition of this report in your hands right now.

    ADCI Survey Methodology Summary of Respondents

    2

  • www.sewells-msxi.com

    ADCI Survey MethodologyAbout Sewells MSXIAutomotive Dealer Confi denceIndex

    TThe Sewells MSXI ADCI is computed on the basis of responses received to a structured questionnaire from the automotive dealerships. The questionnaire attempts to capture their sentiment about economy in general and their business in particular on a six month horizon.As per the design, the ADCIs range is between -100 and +100, where an index score of -100 represents the most pessimistic outlook, and +100 indicates the most optimistic outlook. The index is based on how dealerships see the overall market and their businesses performing in next six months.

    The Sewells MSXI tracks the trend of the index which o ers an insight into the future direction of the market. We believe that it is the movement of the index that o ers greater insights than its absolute value in a particular quarter.

    In this latest edition of the ADCI, we have captured the sentiment of the automotive dealer fraternity during Oct - Dec quarter of 2016. The fi ndings of this survey are compared with the fi ndings of the previous three editions to map the trend.

    As always, a questionnaire was sent to the automotive dealers across India. A total of 138 responses were received, from dealerships, representing 20 brands. These were used to compute the index. Every e ort has been made to ensure that the index is meaningful and representative of the dealer sentiment. However, we advise reader discretion in using the results considering the low sample in some cases.

    Summary of Respondents

    3

  • ADCI Survey MethodologyAbout Sewells MSXIAutomotive Dealer Confi denceIndex

    Summary of Respondents

    TOTAL NUMBER OF RESPONDENTS

    LOC

    ATIO

    N O

    F R

    ES

    PO

    ND

    EN

    TS

    *Force,Mahindra,Tata and Honda are common brands across categories.

    *Sub-sample size low. Reader discretion advised while considering the statistical signifi cance.

    NORTH PASSENGER CARS

    BEFORE 1975

    PASSENGER CARS

    YE

    AR

    OF

    INC

    OR

    PO

    RAT

    ION

    OF

    DE

    ALE

    RS

    HIP

    8

    4 4

    SOUTH EAST WEST CENTRAL

    20* BRANDS

    TWO WHEELERS COMMERCIAL VEHICLES

    BR

    AN

    DS

    RE

    PR

    ES

    EN

    TED

    20%

    2831

    79

    138

    57%

    23%

    COMMERCIAL VEHICLES PASSENGER CARS TWO WHEELERS

    TWO WHEELERS COMMERCIAL VEHICLES OVERALL

    1975 - 1989

    1990 - 2004

    AFTER 2005

    4 www.sewells-msxi.com

    3

    5%

    17%

    9%

    65CITIES

    35%

    10%

    29%

    1

    27%

    71%

    37%

    9%1%

    1%

    1%

    47%

    16%

    30%

    61% 65%

    29%

  • www.sewells-msxi.com

    The overall ADCI during Oct - Dec 2016 indicates that the dealers are moderately optimistic with the present business conditions in the country. Despite the festive season, dealer sentiment was not high due to low consumer spent on account of currency demonetization.

    The overall ADCI stood at +23 indicating a slightly optimistic sentiment amongst the dealers. It is marginally high from the neutral sentiment.

    The Passenger Car ADCI stood at +31, representing a moderate optimism in the dealers.

    The Two Wheeler ADCI stood at +19, indicating a neutral sentiment.

    The Commercial Vehicle ADCI stood at +12, also indicating a neutral sentiment.

    5

    SEWELLS MSXI

    AUTOMOTIVEDEALERCONFIDENCEINDEXOCT - DEC 2016 INDIA

  • www.sewells-msxi.com

    The index for Passenger Car segment stood at +31 during Oct - Dec 2016, as compared to +45 during Jul - Sep 2016, indicating a weakened optimism of the Passenger Car dealers.

    The sentiment was also seen dipping for the Two Wheeler dealers, where the index was at +19 compared +32 at the end of Jul - Sep 2016 quarter.

    Commercial Vehicle dealers sentiment also weakened in this period. In contrast to the last quarter, the index moved down to +12 vis-a-vis a high of +34 during Jul - Sep 2016 quarter.

    SEWELLS MSXI

    AUTOMOTIVEDEALERCONFIDENCEINDEX-TREND

    6

    OCT - DEC 2016 INDIA

  • www.sewells-msxi.com

    The following pages carry details of the responses received during the eleventh edition of the survey.

    This section presents the distribution of responses across multiple questions and compared with the fi ndings of the previous surveys.

    For better understanding of the analysis, we have added the re-spective questions on each page as asked in the survey.

    SEWELLS MSXI

    DETAILED ANALYSIS

    AUTOMOTIVEDEALERCONFIDENCEINDEX

    Current Economic Environment vis-a -vis same Period Last Year

    7

    01Page 8

    The Impact of Current Economic Environment on the Local Market

    02Page 9

    The Impact of Current Economic Environment on the Dealership Business

    03Page 10

    Dealership Performance vis-a-vis Same Period Last Year04

    Page 11

    Dealership Performance vis-a-vis Last Quarter05

    Page 14

    Expected Economic Environment Next Six Months Compared to the Present

    06Page 17

    Expected Market Performance Over Next Six Months

    07Page 18

    Expected Dealership Performance Over Next Six Months

    08Page 19

    Expected Dealership Performance Over Next Six Months Compared to the Present Level

    09Page 20

    Expected Manpower Strength Over Next Six Months10

    Page 23

    Dealers Opinion On How Does Vehicle Recalls by OEMs Impact Their Sales

    11Page 24

  • www.sewells-msxi.com

    JUL -

    SEP 2

    016

    100%

    80%

    60%

    40%

    20%

    0%1CURRENT

    LAST YEAR

    ECONOMIC ENVIRONMENT VIS--VIS SAME PERIOD

    Overall, 92% of the dealers felt that the current economic scenario in the country was negative.

    Commerial Vehicle and Two Wheeler dealers were even more pessimistic about the economic environment as only 4% and 6% of them respectively saw any pos-itive indications.

    PASSENGER CARS

    OVERALL

    100%

    % O

    F R

    ESP

    ON

    DEN

    TS

    VERY NEGATIVE

    TWO WHEELERS COMMERCIAL VEHICLES

    NEGATIVE POSITIVE VERY POSITIVE

    80%

    60%

    40%

    20%

    0%

    8

    7

    71

    202

    5 7

    74 64

    APR -

    JUN 2

    016

    JAN - M

    AR 20

    16

    2

    27

    65

    6

    11

    37

    49

    3

    8

    78

    14

    OCT -

    DEC

    2016

    56

    2910 14

    82

    4

    77

    6 171410

    76

    Survey Question

    In your assessment, how is the current conomic environment in the country, vis--vis same period last year?

  • www.sewells-msxi.com

    2THE IMPACT OF CURRENT

    ON THE LOCAL MARKET

    ECONOMIC ENVIRONMENT

    During Oct - Dec 2016 quarter, about 95 % of the dealers felt that the current economic scenario was not encouraging for their local market.

    Of the total Passenger Car and Two Wheeler dealers, 94% had this opinion com-pared to 28% and 23% in the previous quarter.

    None of the Commercial Vehicle dealers felt that current economic scenario had a positive impact on their mar