Tamil Nadu, Andhra Pradesh, Karnataka and Kerala are among the top 10 states that contribute to more than 75 per cent of the total aftermarket potential, according to according to a CII report.
The vibrant automotive sector is driving the growth of the automotive aftermarket in India and is estimated to grow at Rs 75,000 crore by FY 2020, according to a CII report released at the 8th Edition of Autoserve 2018 - India’s go to event for the automotive aftermarket organised by the Confederation of Indian Industry (CII) in Chennai from November 23-25.
India’s car market has the potential to reach more than 6 million units annually by 2020 up from 3.7 million in 2016. Through the Automotive Mission Plan 2026, the government and industry have targeted to almost triple industry revenues to about $ 300 billion, improve manufacturing competitiveness and expand exports to $ 80 billion. Increase in creation of job opportunities is also considered one of the objectives. “New mobility solutions market will grow to around $2 trillion market by 2030. Revenue from the taxi cluster alone is expected to exceed $1 trillion by 2030,” said the report, titled ‘Transformation shifts in mobility and impact on aftermarket in India’.
Growing vehicle parc (a term for all registered vehicles within a defined geographic region) alongside growing customer loyalty for the OE service channel is restraining aftermarket, added the report. Passenger vehicle dominates the market with 37 per cent, followed by commercial vehicle at 30 per cent.
Total aftermarket has grown at a CAGR of 14 per cent over the last 5 years. Tamil Nadu, Andhra Pradesh, Karnataka and Kerala are among the top 10 states that contribute to more than 75 per cent of the total aftermarket potential. Increasing vehicle ownership (new and used vehicles) in semi-urban and rural markets is driving demand for auto components in the country.
Vehicle parc is expected to grow 6-7 per cent during the next year, thus offering substantial opportunity for independent aftermarket service providers – both existing and new entrants to grow, stated the CII report.
India’s move towards a unified tax regime (ie GST) and push for Make in India offer opportunity to establish and strengthen the local presence. In addition, relatively lower manufacturing costs make it possible to make the country an export hub for auto parts similar to the case in news cars.
CII Autoserve 2018 provided a platform for the auto aftermarket industry to understand the latest trends in the relevant sector and also enabled them to adopt best technology/solutions to meet their ever increasing demands for efficient, better and environment friendly solutions.
The exhibition witnessed the participation of over 100 exhibitors with representation from 10 countries including UK, USA, Germany, Japan and China. The exhibition focused on a wide range 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-air-conditioning besides focused pavilions for tyre and battery.