Making Its Mark

Not surprising that Landmark Cars, the preferred dealer (No. 1) of the names mentioned, barring Renault (No. 3), tops this year’s Fortune India’s The Next 500 list with a total income of ₹3,510 crore (FY23). Though founder and chairman Sanjay Thakker is happy to take the top honours, he tells Fortune India, “We would have been in the Fortune 500 India list, if you had considered our proforma revenues (₹3,850 crore) for the year,” says the 59-year-old sitting out his modest showroom-cum-office at Worli. While the cut-off of the 500th ranked company in Fortune India 500 list for 2023 was ₹3,511 crore, Landmark would have ranked 477th on the list had it made the cut based on its proforma revenue.

The reason Thakker makes the point is that though Landmark is the numero uno dealer for Merc, but ever since the German luxury carmaker changed it sales strategy globally in 2021 by billing the customer directly, its vehicle sales no longer reflect in Landmark’s books, barring the commission paid. “There is a common price across India as it brings transparency to customers and a wider choice of inventory. If there is a discount or an offer, it’s common across the dealer network. People don’t feel it’s a discounted brand. So, it’s a win-win for dealers, manufacturers, and the customer,” says Thakker. The selling and customer experience will be the same as car dealers such as Landmark will still be the touchpoint for prospective buyers and customers. “We do the registration, and financing if need be. We accessorise the car and deliver it. Except that it doesn’t touch my books. I just get a commission at the end of the month,” explains Thakker.

In the conventional automotive retail model, manufacturers (OEMs) sell cars to dealers, who must secure loans to purchase this inventory, accruing significant interest. This system forces dealers to demonstrate high creditworthiness, often pledging personal assets for financial backing. Consequently, there’s a pressing need to sell off inventory, frequently with hefty discounts. This practice not only squeezes profit margins but also encourages less savoury tactics such as handling charges, which is passed on to consumers. “We felt that the only way for a luxury brand to command a premium in the market is when dealers compete on experience and not on discount. So, that was a trigger for us to change the model,” reveals Santosh Iyer, MD & CEO, Mercedes-Benz India.

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