The Manufacturers Association of India (ACMA), the apex

The Indian automotive component aftermarket segment is expected to
grow at a rate of 10.5% and reach Rs 75,705 crore ($13 billion) by 2019-20,
according to a study by ACMA. The Automotive Component Manufacturers
Association of India (ACMA), the apex body of the auto component industry, said
the segment stood at Rs 56,098 crore ($8.4 billion) in 2016-17.

Over the last decade, the Indian automotive components industry has
scaled three times to $39 billion in 2015-16 while exports have grown even
faster to $10.8 billion. While the component industry is expected to grow by 8
to 10 per cent in FY 2017-18 (source: ICRA), the automotive aftermarket
industry is projected to touch Rs. 77,000 crores ($12.85 billion) by 2020.

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India will be the third largest auto components market in the world
by 2025, auto component makers are positioned to benefit from the globalization
of the sector. This has also opened up multiple opportunities in the
aftermarket for many manufacturers, not only in India but globally, who can
offer quality products at competitive costs.

The domestic aftermarket has had a rapid expansion from commercial
vehicles to passenger cars and the usage patterns have changed dramatically
over the past few years. This has led to a tremendous increase in service
requirements. Autoserve focuses on the independent aftermarket to understand
what OEMs and component suppliers need to do to support this eco-system. The
Indian automotive component aftermarket segment is the largest employment
generating sector today. Every one out of four jobs are created in the after
market and service sector.

In the current scenario, the sector is a fast paced, but in order to
ensure its stability in the long run, it must provide some tangible impact on
transport operators, service mechanics and retailers to improve their overall
profitability in business. To achieve this long term goal, there needs to be a
collaborative effort between the component manufacturer and vehicle
manufactures to create value for the































Frost & Sullivan have recently prepared a report on the
automotive market of India. The study showed how various new business models
are driving the sector at a time when e-retailing and connected devices (IoT)
are marking their presence across the country.

India is the world’s 7th largest economy which is
currently growing at 7.5 percent and will easily overtake the various developed
counties such as UK and France in the near future. India has one of the
youngest population in the world and aiding its growth is connectivity. By
2025, it is estimated that there will be 4 billion connected devices in India.

Vehicle manufacturers have started servicing multi brand cars
through organised multi brand outlets and authorised dealers who can invest in
expensive high-tech garage equipment. One such company is Mahindra First Choice
which has carried out this business model successfully in India. Soon, the
trend will shift to online e-retailing where the consumers will be able to
compare the service offered by various such companies in the near future. With
the introduction of the GST, stakeholders in the automotive value chain will
reap benefits of improved operating economics. This is opposed to the current
times where the final consumer bears the brunt of the cascading effect of
multiple taxes along the entire value chain.




The auto parts e-commerce in India is still in a nascent stage due
to lack of presence of the major players, small product portfolio and lower
consumer awareness. There is a high level of trust issue when it comes to
buying parts online.

In 2014, the online auto aftermarket in India was estimated to be
around $20 million and is expected to increase at a CAGR of 7 percent to $150
million by 2020. There are huge opportunities in the B2B space due to the
accelerated growth of the organised and independent players in the market and
customers being positively disposed towards them.



The future
industry growth drivers in this segment will be,

Poor infrastructure conditions

Regular vehicle maintenance

Increasing vehicle age

Increasing second hand car

And the new
market impacting major five trends in the next five years are,

Scrappage of old vehicles

Goods and service tax

Online retail (e-retail)

Development of smart cities

Organised service chains by
renowned market players

Looking at the scenario, the automotive aftermarket in India seems
headed for good times. With a steady growing number of vehicle owners focusing
on keeping their cars well maintained from time to time and carmakers bullish
on launching their own multi-brand service outlets, it won’t be long before the
sector shifts into a higher gear. Greater digital connect for industry players
will be mandatory in the near future as a young vehicle-owning populace prefers
to log on to be informed purchasers.

Source :

As we all know that for a sector to survive
it has to look into long term growth so talking about this sector. This sector
needs to make a tangible impact on operators, mechanics as well as retailers to
improve the profitability. Any stakeholder alone can’t do this job all
stakeholders in the chain needs to work together to provide value to the

Changes made by the transport industry in
regulation are also introducing new challenges for this industry. As center has
made BS IV emission mandatory for commercial vehicle form April 2017 will also
impact the industry as higher BS leads to more electronics in the engine. The
only work around fir this is that the mechanics have to work side by side with
component manufacturer.

Indian automotive industry component
aftermarket is predicted to grow at 10.5% and climb up to Rs.75.705 Cr by
2019-20 according to a study conducted by ACMA. During the year 2016-17 as per
the reports of automotive component manufacturers association of India the
segment stood at about Rs. 56,098 Cr. If the total component is segregated the
commercial vehicle contributed highest of Rs.19,748 followed by passenger car
at Rs. 18,970 and then two & three wheelers followed by tractors.

Growth estimates are as per the predicted
lines of Automotive Mission Plans 2026.These reflect India’s good potential in
aftermarket industry as per PTI.

According to a report by indian automotive
component aftermarket was at around Rs. 56098 Cr. This number is going to rise
sharply and going to reach a size of Rs. 1.79-2 lakh by the year 2026 according
to the report of AMP.

As per a study conducted by the Indian
automotive aftermarket that in passenger vehicle segment original equipment
spares accounts for 40% of total component consumption. Rest 60% is split between
independent aftermarket branded parts and U-parts from unorganized segment. The
use of counterfeit auto component has declined drastically to 5% in 2016-17
from 36% few year back.


Top 5 factors which are going to impact the
evolution of aftermarket demand are as follows. First being the OEMs. Increased
use of technologies will drive up the demand for aftermarket service. Second
being the Online e-retailing. As we all know digital is transforming
businesses. Online e-tailing will provide customers freedom to choose as well
as 24*7 service. Currently online is being dominates by sale of accessories. Third
being GST(Goods and Service Tax).Automotive sector will benefitted by the
implementation in a very big way. Forth being construction of highway and better
quality roads. This will lead to people going on long trip as well as increased
sales of car and thus will help in increasing the demand for aftermarket
service. Fifth and last being the improving technologies in vehicles. Improved
technologies will provide more opportunity to better chains and organized

Business Model for Future

According to one of the report connected
devices like OEMs and e-retailing are changing this industry in a drastic
manner and are making their presence felt. Indian economy is currently the
seventh largest and is growing at 7.5%. IoT is also increasing at a very fast
pace. So for the country which has  young
population and digital and IOT are also increasing a very fast pace connectivity
is going to the main force behind the growth.

New market trends are going to impact
aftermarket sector. Manufacturers are likely to look into entry into business
of multi-brand services through organized multi brand outlets and authorized
dealers. Mahindra First Choice is the only company which had done this uptil
now. E-retailing is going to be the game changer as it will provide consumers
platform to compare market price and shop online. GST will also impact this
sector in a positive manner as it will help in improving operating economics.


The car servicing market in india is
divided or classified into three groups one being organized single brand
segment, 2nd being organized multi-brand workshop and last being unorganized
multi brand. In terms of overall revenue 53% revenue goes to unorganized multi
brand workshop, 46% is organized by single brand segment. The post warranty
vehicle service market consists of small independent garages. Insurance
companies are an important part of the car servicing industry. Owners look for
major repairs of the part which are covered by insurance.

Challenges in multi-brand car service
business in India

Seeing the huge potential in the car
service market organized players came into this field. As this sector has large
scope of growth and profit. According to an estimate the passenger car service
market is INR 40,000 Cr. Before these organized players this sector was
dominated by unorganized authorized players and independent small garages.
There has been very limited success by these companies. According to a research
it has been found out that new vehicle owner tend to move to OEM authorized
workshop for service except easy jobs like tyres and accessories. There are
both organized and unorganized players in this sector. When car warranty period
expires customers tend to move from authorized workshop to normal repair shops.
This is where unorganized sector comes into play. After few service garage
owner advices the vehicle owner and that owner becomes permanent customer of
that mechanic.