Auto aftermarket to hit Rs 44K cr by 2015

The Indian automotive aftermarket is estimated to touch Rs 44,000 crore.

The Indian automotive aftermarket is estimated to touch Rs 44,000 crore by 2015,said a McKinsey report released on Friday. The Indian automotive aftermarket is growing at 11 per cent per annum and is currently worth Rs 1,9000 cr-Rs 24,000 crore.

The growth has been primarily driven by the increasing number of vehicles on the road as well as aggressive expansion of independent and foreign players. While current margins of the industry remain attractive,players across the value chain may see margins reducing to the levels observed in developed economies,said a report,Opportunities in the Indian automotive aftermarket,released in Chennai at a three-day AutoServe 2010 conference organised by the Confederation of Indian Industry (CII). The global aftermarket size is estimated to be around $540 billion,it said.

To sustain profitability,it is imperative that players evaluate additional ways of capturing value,including expanding service networks,developing branded generic parts,forward integrating and building scale. Looking ahead,the revenue pools remain large across the value chain,hence if players are able to pursue appropriate strategies,significant profits can be made in this sector,the report pointed out. The aftermarket includes manufacturers,distributors,retailers,service providers and garages.

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According to the report,spurious parts comprise 30 per cent of the aftermarket. Commercial vehicles,which include multi-axle vehicles,LCVs,buses and trailers,account for roughly 22 per cent of the market while states such as Maharashtra,Tamil Nadu ,Gujarat and Kerala alone account for over 40 per cent.

The car market holds 34 per cent. Tamil Nadu,Maharashtra,Andhra Pradesh and Delhi account for 40 per cent of the car aftermarket. Two-wheeler,considered to be the largest,holds 44 per cent of the total aftermarket with states such as TN,Maharashtra,Gujarat,Uttar Pradesh constituting 45 per cent. This market is expected to grow faster given the large volume of two-wheelers entering into this segment.

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