What’s Auto Dealer Profit Margin in India?

[ilango[speed thirst]]

Rsm was right , some where between 10 to 15% of price.

The top model innova fetches a profit of 1.30L here for the dealer.
The amount seems huge , but its normal %

 

[RSM]

Rsm was right , some where between 10 to 15% of price.

Normally retail business gets this range of margin for any product, so i guessed.

 

[raj_5004]

cool, so if a toyota dealer sells 80 innovas a month, he makes a cool 80-90 lakhs per month!

more if we consider other cars from the same showroom.

 

[ilango[speed thirst]]

And adding to the point they feel that this is nothing ,
service gives more profit than selling a new one.


Same lines said by the ceo of carnation , former chairperson of maruti

 

[RSM]

Yes, but they have sell first to give services.

 

[Sudhir]

cool, so if a toyota dealer sells 80 innovas a month, he makes a cool 80-90 lakhs per month!

more if we consider other cars from the same showroom.

Even if that was a correct number the investments for a car dealership could be 25 crores plus. Its a low margin high volume business. They need to stock vehicles too. Dealers make more money on service in terms of percentage.

Normally retail business gets this range of margin for any product, so i guessed.

10 to 15 percent could be a net margin after covering all costs. But gross margins on some retail businesses ( example clothing ) are more like 100 percent mark up ! But not in the car trade.

 

[Ichimaru]

It is about 10-15% depending upon the price of the car. Atleast this is what i was told at the FIAT dealership i worked.

I think Linea E+ would fetch more margins for the dealer than Linea active.

 

[Umang]

Wow..means more expensive the car is more margin dealer gains. any idea how much it is for mercedes s-class or rolls royce etc?

 

[vaibhav]

Profit margin of car dealers ?>

I am wondering whats the profit margin of car dealers like maruti dealers on a car sold ? I mean they are not offering me even 10k discount on wagonr VXI below their normal price of 4 lacs. They are not giving car for 3.9 lacs.
Best offer i have is 3.94 lacs

 

[Raja]

Re: Profit margin of car dealers ?>

I am wondering whats the profit margin of car dealers like maruti dealers on a car sold ? I mean they are not offering me even 10k discount on wagonr VXI below their normal price of 4 lacs. They are not giving car for 3.9 lacs.
Best offer i have is 3.94 lacs

A dealer has to be our relative in order to reduce his margins on a car sold to us .

Wagon r is good selling car , beside that the company itself if iam not mistaken offering some kind of discount offer . And the dealer must have given some discount from his side . It means he further can't reduce his margins whatsoever they might be ..

 

[jayadev]

Re: Profit margin of car dealers ?>

Margin should be somewhere around Rs.30000 to Rs.60000, Otherwise there is no point selling a car.

They cannot offer discounts just because every second person will ask for same and less.word of mouth issue and it gets very tricky for marketing .

 

[satonaka]

what is the dealers margin in India?

hello, I am interested in how much Indian auto dealers earn by selling one car. I think it may differ according to car maker or car model. If you have any idea or personal experience, could you share with me? thank you

 

[TAUREAN CZAR]

In My opinion it is around 3-5%. I recently read in a newspaper that the margin is not much for the dealers to survive. So the dealers were asking for an increase in the margin for sustainability.

When I purchased my TATA SAFARI in 2007, the dealer margin was 34k. I could get it as the ex-factory price shipping insurance invoice that came along with the registration forms where the price was mentioned and the ex-showroom price difference that I calculated made me arrive at the margin.

Dealers make more money by cashing in on Temp registration amount, which incidentally in Hyderabad is only 200 and is paid online at the dealer login id itself after entering all the details into the RTA portal. But these showroom guys charge us 2k for it.

Similarly while purchasing our Scorpio, I noted that many accessories go into the car, like the central AC panel, DVD, chrome accents, etc., in a pack worth 2,76k on MRP is given at 2,35k.

But central AC panel, mud flaps, carpets, etc., in a smaller or basic pack come at 33-35k which is all dealers margin. They make a killing here. But again all these are not covered in the warranty and any mishap is void of warranty.

What about handling charges. They are actually not supposed to be charged at all. Again insurance. Many of us know that outside it is cheaper, but many items we are forced to take it with the dealer.

So these all add to the dealers margin.

Edit:

Just found a link. 2013 Business line says it is usually around 2.5%, but highest is by TATA MOTORS at 4%.

dealer demand increase in margins

 

[satonaka]

Re: What’s the Profit Margin of Indian Car Dealers?

Thank you for you reply!
It seems dealer system in India is a bit different from that of Japan and really complicated.....

 

[TAUREAN CZAR]

As per another report I just read dealer in USA have only a margin of 2.2% which is much lesser than in India.