Dealer Association President on Ola Electric Scooter:  ‘Direct-to-customer’ model is a concern

Earlier this month, Ola Electric announced that it has received more than 1 lakh bookings for its upcoming electric scooter. With the booking amount set at Rs 500, Ola Electric received these many numbers of bookings only in 24 hours to make a record. However, Vinkesh Gulati, President, Federation of Automobile Dealers Association (FADA) says that direct-to-consumer sales is a point of concern.

In an interview with Autocar Professional, Gulati said that statements like the ‘biggest factory in the world’ and thousands of crores of investment create attention and that is a good strategy. However, Ola is yet to reveal the specifications, mileage and other features of the upcoming scooter.

Gulati feels that Ola Electric has generated a lot of interest, which will ensure that the competitors remain on their toes and fast-track the launch of their products in the market.

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Direct-to-consumer sales model not sustainable

Ola plans to sell the scooter direct to the customer without any involvement of the dealerships, which act as a middleman. However, Gulati claims that it is not a sustainable model and may fail.

Since the dealerships work on the registration charges and insurance, direct-to-consumer products will require a larger infrastructure from the manufacturer. One of the ways is to do the registration centrally but Gulati doubts that Ola will be able to handle such a large number.

Gulati also says that he does not believe that mass-segment products will have any success in the direct-to-consumer sales model. He elaborates that in a vast country like India, it will be a difficult task to handle so many units of vehicles while adhering to the compliances laid by the government.

But he does think that 10 years down the line, this can become a reality. FADA is working on digitalising the showrooms and online registration across the country. Even after the digitalisation of these processes, there is a need for some kind of support to the customer on the lines of what Tesla is doing.

Following the Tesla route

Tesla was the first major automobile company to eliminate the dealership culture. The brand started selling vehicles directly to the customers who ordered them online. There is no third party involved in the sales of the Tesla vehicles and that allows the manufacturer to ensure that the customers get the best experience.

Tesla does have very few showrooms but you cannot buy a car from there. The Tesla showrooms display the cars and will have an online configurator to book the vehicle and get the delivery but you cannot drive a car home from the dealership.

It will be interesting to see how that model will work in India where people do like to check out several vehicles physically before settling on one.

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