The world’s most popular electric car manufacturer, Tesla Inc, which has recently formed its Indian subsidiary, is now looking to open its showrooms in three different cities, as reported by Reuters. The report said that electric car manufacturers are scouting 20,000 - 30,0000 square feet commercial properties to open showrooms in Delhi, Mumbai and Bengaluru.
Globally, Tesla Inc has an online-first strategy and operates via company-owned stores, which are experiential stores. Customers can book and buy online, but they don’t need to visit dealerships for other things apart from experiencing the car. So basically, it doesn’t have the franchise dealer system.
Amit Kaushik, MD and Country Head, Urban Science, said, “In India, it will be no different than the global strategy. I think it will have experiential stores, which are also called alternative retail strategy in that you don’t have physical showrooms as touchpoints. The person can go touch, feel and test drive the car, but that is not the place where you will get the delivery of the car. They will be retailed through an online channel.” “Even from the volume perspective, there is no point of having physical showrooms” he added.
Similarly, Ravi G Bhatia, President and MD, JATO, believes that Tesla has blazed a new trail globally by opting out of sales through franchisee Dealers. This strategy is valid if you have a limited lineup and a small customer footprint. He added, “This will also allow them to shape and control the customers’ ownership experience. In the initial stage, we expect 3-4 showrooms to open up in top metro locations. This should help them knock off India operations rather quickly.”
Most of the carmakers in India launched their online initiatives to book cars online. However, no one yet delivers cars directly to consumers.
“Tesla selling online will not have any impact on the current dealership model of other carmakers Tesla has been in the US for over a decade, and the retail operations of other carmakers are as strong as ever. I don’t think other carmakers will follow suit,” said Nikunj Sanghi, Director, JS Four Wheels.
“Whatever will happen to auto retail in India will not happen because of Tesla, but it will be the ongoing trend and movement towards digital. I think Tesla will have a unique business model of selling on its own,” he added.
Tesla will launch its Model 3 in mid-2021.