Proposal to aggregate and build aftermarket brands
“Automotive aftermarket industry provides 4 times more employment than any other sector in manufacturing, and many of the manufacturing companies survive on the profitability which they derive from the aftermarket,” R Dinesh, Chairman of Auto Serve 2018, and Joint Managing Director of T V Sundram Iyengar & Sons Ltd, said. He was speaking at the inauguration of Auto Serve 2018, India’s largest focused exhibition for the automotive aftermarket Industry. It was organised by Confederation of Indian Industry (CII) in Chennai.
He further said, “There are 5 lakh garages in the country which give employment to 75 lakh people. It is important that their skills are upgraded to a secure future. This year Auto Serve has a representation from 10 countries, including the UK, the US, Germany, Japan and China, that support us to translate our vision into action.”
Auto Serve 2018, a three-day exhibition and conference, had the participation of over 100 exhibitors, displaying Indian and International brands. K Pandiarajan, Minister for Tamil Official Language, Tamil Culture and Archaeology, government of Tamil Nadu, in his inaugural address said, the geographical presence determines the market share in the automotive aftermarket sector. “One sector in India which has a competitive advantage is the automotive aftermarket sector and it is an unsung area. When you split the auto industry, it is divided into 3 different parts (automobile, auto components and aftermarket). Altogether they make the market worth Rs 70,000 crore, collectively contributed by many small scale entrepreneurs also.”
The Minister said, “The government is very pro-industry in terms of taxation, registration, ease of doing business and supporting facilities to the automotive aftermarket sector. This is the time for aggregation and building aftermarket brands in the industry which is the need of the hour. We need to have a world-class aftermarket industry in India which should transcend the borders and create outlets in every part of the world. The industry should work closely with the State government which has a strong interest in automotive aftermarket industry as it is one of the largest employment generating sectors in the State.”
Sriram Viji, Member of National Executive Committee, Auto Component Manufacturers Association (ACMA), and Deputy Managing Director, Brakes India Ltd, said, Indian auto components industry has a turnover of Rs 51.5 billion with a growth rate of 18% annually. “Around 40% of the automotive aftermarket represents the unorganised sector and there is an urgent need to evolve the entire manufacturing and distribution chain. We are closely working with the road transport department for standard and safety in the aftermarket segment. We request the government to consider uniform 18% GST for all automobile components,” he said.
At the event, the Minister also released a report on ‘Transformational Shifts in Mobility and its Impact on Aftermarket’. Some key findings of the reports are: India is targeting the deployment of 5 million to 7 million electric vehicles in the country by 2020 under the National Electric Mobility Mission Plan (NEMMP) 2020; India has become the 3rd largest domestic aviation market globally, recording a total of 190 million domestic flyers in 2017, and is expected to reach 360 million by 2020; India’s car market has the potential to grow up to 6+ million units annually by 2020 up from 3.7 million in 2016; Total aftermarket has grown at a CAGR of 14% over the last 5 years; Tamil Nadu, Andhra Pradesh, Karnataka and Kerala are among the top 10 States contributing to more than 75% of the total aftermarket potential; Increasing vehicle ownership (new and used vehicles) in semiurban and rural markets is driving demand for auto components in the country.
Auto Serve 2018 focused on the whole range of garage equipment, covering cleaning systems, engine tuning, repair and maintenance tools and equipment, paint booth manufacturers, garage systems for large and commercial vehicles, long-distance buses and auto airconditioning.