Indian Auto Component Aftermarket Outlook, 2017

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

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The study provides estimates of the Indian automotive aftermarket potential in 2016-17 generated by a total vehicle population of 228.7 million vehicles, which include, 2 and 3 wheelers, passenger cars, commercial vehicles and farm tractors. The estimated aftermarket potential comprises that of engine components, suspension and braking components, drive, transmission and steering components, cooling systems, electricals and electronics, rubber components and consumables. The study further highlights the share of the total potential by the different component buckets and by vehicle segment, thereby serving as a handy read reckoner for organizations that are considering an entry into the Indian auto component aftermarket, or for companies that are looking to expand to new product lines.

Table of Contents

Indian Auto Component Aftermarket Outlook, 2017Frost & Sullivan AdvisoryIncreasing Competition, Growth in Emerging Markets and Technological Necessities to drive Global Automotive AftermarketTop 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 aftermarketGenuine OE Spares account for about 25% of the total Indian Auto Component AftermarketThe Supplier Field of Vision: What to look out for in India?—OEM strategies and technology penetration to drive growth of competencies in Indian suppliersKey Factors Influencing the Future of the Auto Components Business—Technology Evolution, New Mobility Models and New Regulations…Scope & LimitationsScope & LimitationsKey Market Takeaways: IndiaGlobal 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 2017Growing Vehicle Population, Aging Vehicles and Changing Customer Preferences to be key influencers of the future of the Indian AftermarketAuto 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 localizationNew demand centers in rural and semi-urban areas resulting in new trade hubs, necessitating more distributorsOE Spares to account for 25% of the Indian AC AF—Growing availability of OE spares in the IAM threatens the positions of independent aftermarket brandsPrice 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 vehiclesIAM 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 brandsLocal 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 partsTrends in Auto Component Distribution and Retail [1/2]—Growth of older distribution houses hampered by evolution of distribution channelsTrends in Auto Component Distribution and Retail [2/2]—Alternate sales channel will help meet demand more effectivelyOrder 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 tradeRetailers Resistance to Digitization—90% of retail transactions are in cash; Implementation of GST to pave the way for significant change in retail auto component tradeCustomer Choice of Spares—Key Influencers: Mechanics are key influencers when choosing auto components: incentivizing critical for brand recommendationThe Industry going ForwardAC* suppliers will be driven to focus on technology, product upgrades, improving customer connect, education and innovative service delivery modelsFuture 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 2023Scrappage of Old Vehicles—There is no scrappage law in effect in India although it is being considered for DelhiAppendixGlossaryAnnexure: Our ServicesMaximize opportunities from existing products and markets; systematically explore new products, markets, including inorganic OpportunitiesOur Growth Consulting CanvasLegal Disclaimer




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