Manish Raj Singhania, President of the Federation of Automobile Dealers Associations (FADA), is of the opinion that Tesla Inc. will need to adapt its Direct-to-Consumer (DTC) sales model for the Indian market.
Singhania argues that established dealerships offer a crucial “local connection” with customers, fostering brand loyalty and driving sales. He cites the example of another unnamed automaker that initially adopted a DTC strategy but ultimately resorted to opening experience centres—a move akin to dealerships, but lacking the personal touch dealerships offer.
“This DTC kind of model was chosen by none of the other original equipment manufacturers (OEMs). Because they recognise the value of dealerships, 99 per cent of OEMs still rely on them for revenue.” Singhania said.
The Federation of Automobile Dealers Associations (FADA) is the highest national organisation representing the 2 and 3-wheeler, passenger car, UV, commercial vehicles (such as buses and trucks), and tractor industries in India. It was established in 1964. Representing the whole auto retail sector, FADA India represents approximately 15,000 car dealerships with over 30,000 dealership outlets, as well as several organisations of car dealers at the regional, state, and local levels. At dealerships and service facilities, it employs 4.5 million people together.
“I hope Tesla also understands that we have a deeper connection with people,” Singhania expressed hoping that Tesla will recognise the Indian auto market’s specific needs and forgo its global DTC model.
The remarks by Singhania should be seen in light of the Indian government’s recent decision to ease Tesla’s entry into the world’s third-largest automobile market. Tesla owner, Elon Musk is going to visit India this month to meet with Prime Minister Narendra Modi and discuss his car company’s entry into the country as well as his other businesses, such as satellite-linked telecom services.
Tesla has chosen to sell directly to customers since its launch around a decade ago, and has been relatively successful at that, despite the stiff opposition from the dealership community.
Some of Tesla’s rivals, such as Rivian, Polestar, and Lucid, followed a somewhat similar model to some extent. In India, Bengaluru based Ola Electric has been working with the D2C model.
