PRZOOM - /newswire/ -
Mountain View, CA, United States, 2015/03/23 - Frost & Sullivan, inds that total manufacturer-level parts revenue in India will grow by a CAGR of 12.4 percent (2014-2021) to reach $16.5 billion by 2021. Volkswagen.co.in / Automotive.Frost.com.
New analysis from Frost & Sullivan, Strategic Analysis of the Indian Automotive Aftermarket, finds that total manufacturer-level parts revenue in India will grow by a CAGR of 12.4 percent (2014-2021) to reach $16.5 billion by 2021. Demand for routine maintenance parts such as motor oil, wiper blades and brake pads will increase at least 10 times faster across India than in North America and Europe.
“Global automakers operating in India are looking to source parts locally in order to cut costs in a market dominated by cheap small cars, thus opening up new growth opportunities for part providers,” said Frost & Sullivan’s Automotive & Transportation Principal Consultant, Avijit Ghosh. “For example, Volkswagen India (volkswagen.co.in) plans to develop engines and transmissions in India in a bid to raise locally-made content in its vehicles from 70 to 90 percent.”
However, aftermarket participants face several challenges that curb their potential in the Indian market:
The price-competitive unorganized sector which does not adhere to government stipulations and to a large extent does not pay excise duties and sales taxes eats into the revenues of organized aftermarket participants
Counterfeit components account for 45 percent of passenger car aftermarket part sales owing to the lack of a mandatory standard and the unchecked production and import of counterfeit parts
Close to 70 percent of customers shift to local independent aftermarket (IAM) service centers within two years of their car purchase
IAM suppliers can assist their service partners in seizing this opportunity by providing high-quality parts at a lower price. The anticipated inclusion of a section on aftermarket standards in the Motor Vehicles Act will help reduce the sale of counterfeit components.
“IAM vendors must focus on the mass supply of parts to multi-brand service chain outlets such as myTVS, Carnation and Castrol Pitstop in order to ensure that car owners receive value for money,” recommended Ghosh. “Venturing into the used car and car exchange businesses will also prove profitable for dealers in the Indian automotive aftermarket.”
Strategic Analysis of the Indian Automotive Aftermarket is a Strategic Insight part of the Automotive & Transportation (automotive.frost.com) Growth Partnership Service program. This study discusses vehicles in operation, key industry trends, consumer trends and major market participants in the Indian automotive aftermarket. It also offers a forecast of manufacturer-level revenue and evaluation of wholesale parts and service channels.
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Strategic Analysis of the Indian Automotive Aftermarket / P7A0-18