Class 2: Exide Industries-equally powerful in B2B and B2C

segment
Introduction: Exide Industries is the largest manufacturer of storage
batteries in India. It has the widest range of storage batteries in the world
from 2.5 Ah to 20,400 Ah capacity, covering the broadest spectrum of
applications. The Company has also recently forayed into manufacture and
sale of Home UPS/Inverters. Exide has four divisions such as Automotive,
industrial, submarine and exports. In automotive segment, it is the strongest
player in retail trade (B2C).
This case talks about Exides B2B business in automotive and industrial
segment. How the company has created a stronghold in these pockets with
its focused strategies and how marketing plan for B2B and B2C segment
differs.
Exide Industries- In FY14, Exide reported net revenue of Rs. 5,964 crores
with net profit of Rs. 723 crores. During FY07-14, companys revenue has
galloped at 18% CAGR, indicating various alternative business segments and
customized strategy adopted by Exide. Automotive segment accounts for
60% of the revenue share, followed by Industrial and exports segment with
35% and 5% share respectively.

Gross Revenue
1% 5%

8000
6400

35%

4800

60%

In INR Crore

3200
1600
0
FY06

FY09

FY11

FY14

Source: Exide Annual Report 2014

Segments in B2B space:

Automotive

Industrial

Submarine

Exports

1. Automotive: Exide is the sole suppliers of automotive batteries to

leading auto companies (called as Auto OEMs) such as Maruti,
Mahindra, Bajaj, Hyundai, Hero Group and Tata Motors. The company
commands impressive market share of 72% in auto OEMs segment.
Automotive segment accounts for 60% of the revenue share, followed
by Industrial and exports segment with 35% and 5% share respectively.
2. Industrial- Industrial sales include sales to power back up equipments
(UPS & Inverters), back end equipments (fork lifts, golf carts),
infrastructure sector (railways, telecom and power generation).
Companys clients include Siemens, Ericson, ABB, L &T, BHEL and
Indian railways.
3. Submarine Batteries: Exide is the leading supplier of customized
batteries used in submarines. The Indian defense system has entered
into a long term sourcing contract with Exide for such batteries.
Although the business is in nascent stage, it has huge growth
potentials considering UPA governments announcement of adding five
more submarines to its fleet in years to come.
Strategy in B2B space which makes a difference.
1. Dedicated plants for major auto OEMs- Exide has set up plants in
striking distance of every mother plant by its clients. For Ex. Exides
plants are located near to Mahindras Nasik plant, Tatas and Bajas
Pune plant, a dedicated plant near to Hyundais set up in Chennai. This
has given two distinctive advantages to the company. Smooth and
regular supply to auto OEMs and reduction in transportation cost,
which forms a major part of the cost structure of any battery
manufacturer.
2. Scale of operation makes the difference: With Seven factories
spread across the country, Exides range and scale of manufacturing
operations can be matched by very few companies in the world.
Together, they produce an annual output of 8 Million Units in
Automobile batteries (including batteries for motor-cycle applications),
and over 600 Million Ampere-Hours of Industrial Power. Moreover,
operation schedule is designed in such a manner to ensure seamless
and smooth supply to major customers.
3. Positioning as partner in new product development- Due to
Exides long standing relation with major auto OEMs and critical value

of batteries in auto designing, the company has secured role of

partner in new product development. Credit goes to Exide for
inducing auto makers to change from lithium-ion batteries to lead acid
batteries due to superior performance and suitability to new age
vehicle technology. It has also introduced products based on improved
technology to strengthen its leadership in Indian markets further.
4. Backward Integration: in 2007, Exide acquired 100% stake in
Chloride Metals and 51% stake in Chloride Alloys. With this move, The
Company secured assured supply of lead, a major raw material in
battery manufacturing. Exide has also reduced dependence on
imported lead by acquisition of lead smelting facility. Today, 40% of
total lead requirement is managed through captive production
facilities.
5. Unconventional business segments: As a strategic move, Exide
forayed into new business segments such as Submarine batteries,
Home UPS and batteries required for Railways. Although, these
divisions are yet to provide significant revenue support, the company
has reduced its over dependence on automotive segment for topline
growth.

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