MOHD YOUSUF MASOOD

Automotive Market Overview

The impulsive progression in India’s automotive market has captured the attention and focus of
the world’s leading automobile and component manufacturers over the last decade. Further, the
government’s initiatives for e-mobility are expected to attract new market players in the Indian
automotive industry which is likely to expand the automotive industry growth.
The automobile industry in India is the world’s fourth-largest vehicle market. In 2018 India was
the world's 4th largest manufacturer of cars and 7th largest manufacturer of commercial vehicles.
Indian automotive industry (including component manufacturing) is expected to reach INR16-18
trillion (USD251-283 billion) by 2026.

Indian Market Segmentation of 4 Wheelers

Indian Market has been known for the market for hatchbacks. Even the government has
implemented rules to allow the development of cars under 4 metres, as they attract lesser duty
and other taxes. Petrol engines smaller than 1.2- litre and diesel engines that are under 1500cc
have a lesser excise duty. This helps to increase fuel efficiency and also reduce pollution.
MOHD YOUSUF MASOOD

India Automotive Aftermarket Market Segmentation

● Wear-and-Tear ● Accessories and ● Diagnostics
Parts Appearance Products
● Crash-Relevant Products ● Services (Fleet
Parts Management etc.)
The Automotive Aftermarket refers to the manufacturing, retailing and installation of all vehicle
parts after the sale by the OEM (Original Equipment Manufacturer). The automotive aftermarket
is broadly divided into three sectors:
❏ Organized Single Brand Outlet ❏ Organized Multi Brand Outlets
❏ Unorganized MBOs/ Workshops ❏ Online Platforms

The post-warranty vehicle (>4 years) service market was mainly captured by small independent
garages i.e. the unorganized sector because of the huge cost differences (of after warranty
services) between authorized and local garages.
The total aftermarket has grown at a CAGR of 14% over 2013-2018. The vibrant automotive
sector drives the growth of the automotive aftermarket in India and is estimated to grow at
INR75,000 crore by fiscal year 2020.
MOHD YOUSUF MASOOD

Taking into consideration factors such as an increase in the spending capacity, changing
consumer behaviour, penetration of technology, e-commerce and most importantly; the need for
an organized market. Online e-retailing will soon be a business disruptor for this sector.
In 2014, the online auto aftermarket in India was estimated at around USD20 million (less than
one per cent of the overall parts aftermarket at a retail level) and is expected to increase at a
CAGR of 7%, valued at USD26 million in 2018 and is projected to reach USD30 million by
2020. There are huge opportunities to explore in the B2B space due to the speedy growth of
organized and independent workshops along with customers being positively disposed towards
them.
Automotive Technologies
Technologies like Anti-lock Braking System (ABS) and Reverse Parking Sensors (RPG) have
very high penetration across vehicle segments and are expected to generate revenue of
INR16,000 crores by FY 2020.
MOHD YOUSUF MASOOD

Benefits of collaboration
● Cut costs: Collaboration with Auto ● Centralized workshops.
Tech companies will reduce the cost ● Improved Flexibility of the
as the parts can be directly sourced Organization.
from the manufacturers. ● Improved relationship with suppliers,
● More Productivity: Collaboration manufacturers, dealers and
helps the team to learn from each workshops.
other and from their past mistakes. ● Accelerated Business Velocity.
● Improved customer experience: ● Increased Profitability.
Customer service can be more ● Wide business network.
quickly, hassle-free and can get all ● More reach and service areas
they need in just “one-stop”.
Recommendation​:
1. Identify the reasons for collaborations: COVID 19 situation, more customer reach, better
service, low cost etc.
2. Identify the company and people for collaborations: Collaborate with those entities that
can provide long term business-building results.
3. Research: A thorough B2B research is required.
4. Plan the collaborative values: Must have clear understanding about what will be involved
and what will be the benefits. Create value proposition like Quality & outcomes,
operational efficiency, Finance & activity and workforce, culture & engagement.
MOHD YOUSUF MASOOD

5. Collaborate: Sign the agreement like parties involved in the agreement, services to be
performed by each partner, terms of the agreement, duration of the agreement etc.
Reference
● https://www.goldsteinresearch.com/report/india-automotive-aftermarket-industry
● https://www.nutcache.com/blog/benefits-of-collaboration-between-organizations-and-tea
ms/
● https://auto.economictimes.indiatimes.com/news/aftermarket/indian-automotive-aftermar
ket-may-touch-rs-75000-crore-by-2020/66814596
● https://autovistagroup.com/news-and-insights/why-automotive-industry-collaboration-im
portant-and-essential
● http://clepa.eu/wp-content/uploads/2017/07/McKinsey_The-changing-aftermarket-game.
pdf
● https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/ready-for-in
spection-the-automotive-aftermarket-in-2030