Increasing Competition, Growth in Emerging Markets and Technological Necessities to drive Global Automotive Aftermarket

Top issues for Global CEOs (Suppliers’ field of vison)—Implications of changing geopolitical environments, possible economic slowdown, and stronger presence of non-automotive participants in the aftermarket

Genuine OE Spares account for about 25% of the total Indian Auto Component Aftermarket

The Supplier Field of Vision: What to look out for in India?—OEM strategies and technology penetration to drive growth of competencies in Indian suppliers

Key Factors Influencing the Future of the Auto Components Business—Technology Evolution, New Mobility Models and New Regulations…

Scope & Limitations

Global Automotive Aftermarket Top—Trends: Aftermarket solutions as a result of a digitized and connected ecosystem will be the most talked about areas of innovation in 2017

Growing Vehicle Population, Aging Vehicles and Changing Customer Preferences to be key influencers of the future of the Indian Aftermarket

Auto Component Aftermarket Potential to grow to INR 75,552 Cr. by 2019-20; Consumables, drive, transmission & steering components to account for 44%

Imports Analysis—China, South Korea & Japan account for ~54% of the total aftermarket spares imports to India; significant need for higher localization

New demand centers in rural and semi-urban areas resulting in new trade hubs, necessitating more distributors

OE Spares to account for 25% of the Indian AC AF—Growing availability of OE spares in the IAM threatens the positions of independent aftermarket brands

Price Analysis: OES vs. IAM Branded vs. Local Brands—Local brands being 40% cheaper than genuine OE spares are considered ‘value for money’ alternative especially for older vehicles

IAM Parts vs. OE Parts—IAM parts challenged due to increasing customer loyalty to the OE service channels and OE spares

Manufacturing Hotspots of Local Auto Component Brands—Ludhiana and the NCR are the manufacturing and trade hotspots for local brands

Local Brand Growth—The last 5-7 years have seen strong proliferation of local auto component brands; Increasingly perceived as value for money relative to IAM branded parts

Trends in Auto Component Distribution and Retail [1/2]—Growth of older distribution houses hampered by evolution of distribution channels

Trends in Auto Component Distribution and Retail [2/2]—Alternate sales channel will help meet demand more effectively

Order Fulfilment and Inventory Practices—Distributors report the need for better order fulfilment and inventory practices; also for the demarcation of trade territories to allow competitive trade

Retailers Resistance to Digitization—90% of retail transactions are in cash; Implementation of GST to pave the way for significant change in retail auto component trade

Customer Choice of Spares—Key Influencers: Mechanics are key influencers when choosing auto components: incentivizing critical for brand recommendation

AC* suppliers will be driven to focus on technology, product upgrades, improving customer connect, education and innovative service delivery models

Future Regulation—Bharat NCAP: Frontal Offset and Side Impact tests to carry maximum weightage; Demand for safety components like Airbags and pre-tensioners to grow with implementation

BS V /BS VI Implementation: Availability of Fuel Key—Oil & Environment Ministry’s push for direct BS VI in 2020; SIAM continues to lobby for BS V in 2019 and BS VI in 2023

Scrappage of Old Vehicles—There is no scrappage law in effect in India although it is being considered for Delhi

Glossary

Maximize opportunities from existing products and markets; systematically explore new products, markets, including inorganic Opportunities

Our Growth Consulting Canvas

Legal Disclaimer