A deal with the beauties

CAR SALESMAN ARE TRADITIONALLY seen as pushy, fast-talking, smooth people whose ambition is to sell you a lemon. That might have been true in the yesteryears. But when a buyer is someone who writes out cheques for a crore or so of rupees, the car salesman is a different animal altogether, says Gurmeet Singh Anand, managing director of AMP Motors, the sole dealer of Jaguar Land Rover for the National Capital Region and Rajasthan. “When selling to the affluent, you don’t just manage a sale, you manage a relationship.”

That relationship includes everything from arranging vehicle finance and insurance to identifying and sometimes training drivers. But it’s obviously good business. When Anand, who has an auto parts business, thought of diversifying, he chose the rarefied space of selling luxury cars—Jags, Bimmers, Audis, and the like. There are 54 luxury car dealers representing these companies in India today, and the number is growing.

SO WHAT DOES IT TAKE to be a dealer of luxury cars? The right demeanour and a stack of cash are must. It helps to have strong networking and leadership skills, an understanding of the product range and the dynamics of the market. A passion for cars is a given.

Atul Aggarwal, the director of Jaycee Automobiles, is Audi’s dealer in Ludhiana, Punjab, and Chandigarh. Like Anand, he moved from manufacturing auto components to selling cars to India’s rich. For him, the right attitude can make the difference between success and failure. Aggarwal should know. He runs a 40,000 square foot showroom in Ludhiana, the biggest Audi dealership in India. “The dealer has to live the brand. This should come across in the way he conducts himself at the workplace and outside.”

Anand, Aggarwal, and other dealers we spoke to agree that it takes money to get money. It’s easy to see why. A Jaguar dealer who wants to display an XKR convertible will have to fork out more than Rs 1 crore to import the car before it can be sold for Rs 1.46 crore. About 40% of the initial investment goes into importing the cars for display. “For every Rs 20 crore of turnover you’re aiming for, you have to invest at least twice the amount,” says Anand.

Equally important is the address, which has to pass muster with the car maker and buyers. And then it has to be designed to meet the exacting standards of the car company. Doing up a standard 8,000 square foot space can set a dealer back by at least Rs 8 crore. A service centre, which is mandatory, adds another Rs 10 crore to the bill.

Showroom done and cars in place, next on a dealer’s to-do list is getting the right manpower. It is a nascent business. So most dealers either have to hire engineers from abroad or train Indian engineers. Training salespersons abroad can cost between Rs 5 lakh and Rs 15 lakh, depending on the number of people in the training group. “A person selling a Maruti can’t sell an Audi the same way. It needs a different mindset,” says Aggarwal, who brings his management training to bear when creating the training programme for his staff.

In a business that can take up to five years to break even, a dealer has to have patience. “The percentage margin on luxury cars is a single digit,’’ says Anand. But the growth of the market is the big draw. That’s one of the reasons why Anand casts his net wide; he has four showrooms in Delhi, Jaipur, and Gurgaon, with about 38,000 square feet of display space in all.

ONCE THE DEALERSHIP IS UP and running, meeting annual targets, set jointly with the manufacturers, poses a challenge. Having wealthy friends and relatives helps—Anand sold his first Land Rover to a friend—because they can drive the initial sales. But after that, promotion and marketing through mailers, events, and cold-calling, is the route most take. “Making enquiries with prospective buyers, trying to gauge their interest, and following up are all in a day’s work,” says Aggarwal.

Vijay Chhabra, a New Delhi-based interior designer, who gifted himself a Jaguar on his 60th birthday, agrees that it’s more than showrooms. “I would forgo a brand if dissatisfied with the behaviour or services of the dealer. After all, this is a long-term relationship,’’ he says. Chhabra also owns a Mercedes S-Class, but was unhappy with the Merc dealer, so decided to go to Jag when he wanted to splurge. “The willingness to go the extra mile to meet the whims and fancies of customers makes a dealer stand out.”