Auto sector faces short-term liquidity constraint: Pradeep Agarwal

Even as the scourge of Covid-19 has taken a heavy toll on every sector of the economy including automotive sector, the industry needs to familiarise itself with some of the new realities of the post-Covid-19 world like preference for personal mobility, going digital, online marketing among others. Speaking to Orissa POST, Pradeep Agarwal, Managing Partner, JMG Automobiles highlights more about the constraints and the way forward. Excerpts…

How did covid-19 impact automobile business? What were the challenges you faced and how did you overcome them?

The automotive sector was bracing for a difficult year even before the pandemic. Auto sales had been tepid for 12 to 15 months before the Covid outbreak stalled production and overall economic activities. The industry now faces concerns on short-term liquidity as well as long-term growth in revenue and profitability even as automakers restart production. As it emerges from this crisis, the industry will need to familiarise itself with some of the new realities of the post-COVID-19 world like preference for personal mobility, going digital, online marketing, innovating with new features, and growth of subscription model. With things gradually opening up, travel has also started picking up and so has a preference for personal mobility. Hence, we are optimistic that 2021 will be a good year for the auto industry, specifically for two-wheelers.

Nowadays, automobile manufacturers as well as dealers are facing scores of problems. What is your take on this?

The pace of change across all industries is accelerating. Dealerships are facing disruptions from multiple directions – evolving mobility solutions, intensifying competition, product innovation, technology proliferation, stringent regulations, and changing customer preferences. Digitisation is the harbinger of change in the vehicle distribution industry, impacting everything from customer acquisition and vehicle delivery to sales. From the point of sale via digital tools to customer data analytics, remote servicing, and predictive maintenance – the way vehicles are purchased, distributed, and serviced is changing dramatically. Online presence is increasingly becoming critical to first time customers. However, it continues to be a blind spot for traditional dealers as most of them do not intend to increase their online presence.

Market is not showing that type of growth in demand. How would you think about trend in two-wheeler sales?

Going forward, market volumes are likely to improve on the back of greater economic activity and better sentiment due to Covid vaccine. Meanwhile, dealers looking at ways to reinvent themselves such as reaching out to the customer in an all-new way through online platforms while delivering a personalized experience. A positive outlook for monsoon, strong rural demand, and the availability of finance are all indicators of a good economic recovery and buoyant demand, going forward in 2021-22. Challenges will remain in the short term due to the uncertainty of the pandemic and its impact on the supply chain. However, every crisis is an opportunity and we are trying to learn from it and define new norms, which we can benefit from.

JMG automobile is a pioneering auto dealer in the state. How did you enter this business? What is the specialty of your showroom?

We have been blessed to be associated with Hero MotoCorp the last 21 years. JMG has sold over 2 lakh two-wheelers only because of our customer-centric focus. For us at JMG, every aspect of customer service & convenience is the utmost priority. Quick and efficient service plays a crucial part in customer satisfaction, right from offering appointment-based services to a direct walk-in. What we learned new was to achieve continuous technological & customer convenience enhancements by offering ‘JMG 60, 90 & 120’. JMG 60 means a periodic maintenance service within 60 minutes of receiving the vehicle. Which was further advanced to JMG 90 & 120 for quick repairs & other services.

Hero is very aggressive about new model launching. How would you see the response to the company’s product portfolio?

Hero surpassed the significant milestone of 100 million units in cumulative production. As part of the next five-year plan, Hero MotoCorp will introduce over 10 products including variants, refreshes, and upgrades every year.

Joblessness is a key issue nowadays. What would be your views regarding setting up a business rather than choosing a job?

Running a business is far bigger than being in a job. In a job, no matter what kind of work you do, you are always excelling in 1 direction which increases your chances of getting rehired even if you lose a job. There is no limit on how much and how fast you can earn as a business owner. Whereas in job, you will have to wait for a certain period for taking the next hike, no matter how good you are. Hence, business is better than a job. The only thing that matters is your current satisfaction and your long-term stability. The rest all is just noise.

What did you learn from this pandemic? How did you spend time in lockdown?

The main thing I learned is the value of freedom especially in the lockdown. At the end of the day, we need to respect the environment and not meddle with it. I spent time connecting with friends, reading, training online, yoga and meditation, playing board and card games, binge-watching series and attending virtual concerts.