An exploratory study of factors influencing manufacturer-dealer relationship in Indian automobile industry

Abstract

The purpose of this study is to explore critical factors that define the level of satisfaction and bond of relationship between automobiles companies and their dealerships. Indian automobile industry is one of the world’s fastest growing industries and the success of auto companies is largely depends on their robust and healthy dealer network. In this paper, we attempt to identify critical factors which can influence the relationship of manufacturers and dealers. The research is based on a survey carried out in the Pune region of Maharashtra, where we focused on identified critical factors of mutual relationship. It was also noted that new-age auto dealership owners are looking forward to relationships beyond just return on Investment. Using statistical data analysis, we also attempt to identify the most critical factors that can influence dealer-original equipment manufacturer relations. These factors were return on investment, future growth potential, support from the OEM team, involvement in policy decision-making making and supply of quality products. The results also indicate the roles and responsibilities of an OEM in building strong relationships with its dealers to improve sales.