According to a media report, Tata Motors dealerships have turned profitable for the first time in nearly a decade. In FY2020, only 43% of its dealers were profitable. This figure has now risen to almost 99%.
The profitability of dealers can be attributed to the consistent increase in sales over the past decade. Tata Motors' passenger vehicle sales have more than doubled in the last decade. The carmaker sold 2,29,325 units in FY2013, which soared to 5,38,640 units in FY2023.
The higher contribution of models priced above the Rs 10 lakh mark in overall sales is also said to have helped dealer partners increase their profitability. These include EVs, which command a price premium of Rs 3-3.5 lakh over ICE models.
Tata is also said to have reduced the share of dealers in consumer schemes, which has helped maintain dealer margins. The share of service in a Tata dealer's income is only 25%. However, this is expected to rise when newly launched models start coming to service stations after the completion of their warranty period.
Source: ET Auto