Tata plans to boost dealers in rural areas
March 20, 2008
By Roy Cokayne
Pretoria - Tata, the Indian vehicle brand, has launched an initiative to uplift small and medium enterprises in the motor industry while expanding its light commercial vehicle sales and service footprint in rural South Africa.
Phonnie Cilliers, the chief operating officer at Accordian Investments, said yesterday that the initiative involved the establishment of new dealerships, called Tata Bakkie Centres, that sold only Tata light commercial vehicles. Accordian is responsible for the local distribution and marketing of Tata vehicles.
The dealerships would be based only in rural areas, with bakkie sales of between 100 and 150 units a year, Cilliers said. A dealership would be a "bolt-on business" for an established vehicle workshop. The first Bakkie Centre was already operational in Bronkhorspruit. A further 35 were planned throughout South Africa, as well as one in Namibia and another in Lesotho.
The initiative aimed to keep the fixed overheads of these dealerships under R20 000 a month, compared with about R800 000 for existing traditional dealerships. The plan would be a boost to small and medium enterprises because it did not involve any up-front financial investment by the entrepreneur except security of R500 000.
"It is a community-based initiative and the guy must be well-known and respected in the community," Cilliers added. "The entrepreneur must have motor trade experience and an existing business, such as a service centre."
Rustom Nagporewalla, Tata Motors' regional manager, said the initiative was unique to South Africa, although some ideas were taken from rural India. It was the first step towards the development of more rural financial and other products.
Cilliers said Tata did not see the plan as a black economic empowerment initiative, but as one aimed at supporting service for Tata owners and potential owners in rural areas.
Each Bakkie Centre will receive Tata backing through the tooling, canopy and signage, computerised communication links, stock, a sales person and a demonstration vehicle.
Cilliers stressed that customer care and Tata's corporate identity would not be sacrificed. With all the support structures in place, Tata calculated that the centres would break even by selling only two vehicles a month, but had the opportunity to earn a gross income of R30 000 by selling three bakkies in a month.
He believed the initiative could give a big boost to rural areas, helping to develop entrepreneurs, while reaching all existing and potential Tata buyers countrywide. "This is a unique opportunity for a guy who never in the past had the opportunity to link up with a major motor manufacturer or importer. In the next five years, where do you think Tata is going to be?"
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