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  • 1

    The changing Aftermarket Industry and

    how Indian Automotive ancillaries can

    benefit from arising opportunities Prepared for:

    Singex

    Prepared by:

    Spire Research and Consulting

    Date:

    28th September 2019

  • 2

    Topic

    1 Automotive Market

    1a Overview

    1b Segmentation of four wheelers

    1c Tire Industry-Overview

    1d Tire Industry-Key Players

    2 Automotive Aftermarket

    2a Overview & Trends

    2b Online E-retailing

    2c Safety & Security

    2d Auto Components Export

    3 Summary

    Agenda

  • 3

    Automotive Market – Overview

  • 4

    Automobile Industry in India – Overview

    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.

    35 39 39

    44 51

    2 2 2.2

    2.5 2.6

    0

    1

    2

    3

    0

    20

    40

    60

    2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

    i n

    M

    ill io

    n s

    In B

    ill io

    n s

    Size of the market FY19

    Overall Revenue of Auto Components Number of Automobiles Sold in India

    Source: SIAM Society of Indian Automobiles.

  • 5

    81%

    13%

    4% 3%

    Automobile Domestic Sales

    Trends FY19

    Two Wheelers Passenger Vehicles

    Commercial Vehicles Three Wheelers

    Automobile Industry in India – Overview

    Source: SIAM Society of Indian Automobiles.

    Domestic sales are dominated by large number of two wheeler vehicles. In 2017, India surpassed China to become

    the world’s biggest market for two wheelers.

    A total of 21.1 million units were sold last year, which comes down to 58,000 units every day.

  • 6

    Automobile Industry in India – Segmentation of

    four wheelers

    50%

    26%

    24%

    Automobile Domestic Sales Trends

    2018

    Hatchbacks SUV's and MUV's Sedans

    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.

    Total Number of Commercial

    Vehicles Sold in 2018

    1,007,319

  • 7

    Tire Industry: Overview

    Key Figures for FY2018: No. of Tyre Companies in India: 41 No of Tyre Plants in India: 62 Industry Turnover 2018-19 (est.): INR63000 crore (USD9 Bn) Exports 2018-19 (est.): INR12890 crore (USD1.8 Bn)

    0%

    20%

    40%

    60%

    80%

    100%

    38% 30%

    62% 70%

    Distribution across various

    channels

    Aftermarket OEM+exports

    58% 28%

    14%

    Global

    Truck & Bus

    Passenger Vehicle (PV)

    2/3-Wheeler

    55% 22%

    13%

    10%

    Indian

    Truck & Bus Passenger Vehicle (PV) 2/3-Wheeler Others

    Distribution of exports/sales of

    Tyres manufactured in India FY18

    2011 2018

  • 8

    Tire Industry: Key Players and Plant Locations

    • Limda, Gujrat

    • Perambra, Kerala

    • Kalamessey, Kerela

    • Orgadam, Tamilndadu

    • Chittor, Andhra Pradesh*

    • Kankroli, Rajasthan

    • Banmore, Madhya Pradesh

    • Mysore (2), Karnataka

    • Sriperumbudur, Tamil Nadu

    • Haridwar, Uttrakhand

    • Balasore, Orissa • SIPCOT Thiruvallur, Tamil Nadu

    • Dhar, Madhya Pradesh

    • Pune, Maharashtra

    • Chennai, Tamil Nadu

    • Arkonam, Tamil Nadu

    • Trichy, Tamil Nadu

    • Puducherry

    • Medak, Telangana

    • Poda, Goa

    • Kottayam, Kerala

    • Baruch, Gujarat*

    • Mumbai, Maharashtra

    • Halol, Gujarat

    • Ambarnath, Maharashtra

    • Nasik, Maharashtra

    • Nagpur, Maharashtra

    • Sriperumbudur, Tamil Nadu* • Bahadurgarh, Haryana

    • Modipuram, Uttar Pradesh • Rudrapur, Uttarakhand

    • Madurai, Tamil Nadu

    • Baliabhgarh, Haryana

    • Aurangabad, Maharashtra

  • 9

    Automotive

    Aftermarket

    Overview and Trends

    Online E-retailing

    Government Regulations

    Auto Components Export

  • 10

    Automotive Aftermarket

    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:

    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.

    46%

    52%

    1% 1%

    Automobile Aftermarket FY19

    Organized Single

    Brand Outlet

    Unorganized

    MBOs/ Workshops

    Organized Multi

    Brand Outlets

    Online Platforms

    Automotive Aftermarket Products/Services

    Replacement Parts

    Replace the original stock components which are worn out

    in due course of time.

    Accessories

    Made for comfort, convenience, performance, safety, or customization,

    and are designed for an add-on.

  • 11

    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.

    Automotive Aftermarket

    Drive

    Transmissi

    on and

    Steering,

    21%

    Engine

    Compone

    nts, 18%

    Electricals,

    18%

    Suspensio

    n and

    Braking,

    15%

    Consuma

    bles and

    Miscellane

    ous, 14% Cooling

    Systems,

    8%

    Rubber

    Compone

    nts, 3%

    Electronic

    Compone

    nts, 3%

    Product-wise share in

    aftermarket turnover (FY18)

    Major Players by Segments:

    Engine & Engine Parts

    Goetze, Rane Engine Valves, Ucal Fuel Systems etc.

    Transmission &

    steering parts

    Sona Koyo Steering

    Systems, Rane NSK Steering Systems.

    Suspension & braking parts

    Brakes India, Rane Brake Lining, Jamma Auto & Jai Parabolic and Gabriel India.

    Electrical Lucas TVS, Denso, Delco Remy Electricals

    Equipment Lumax, Premiere Instruments & Controls

    and Jay Bharat Maruti.

  • 12

    Automotive

    Aftermarket

    Overview and Trends

    Online E-retailing

    Government Regulations

    Auto Components Export

  • 13

    Trends in Automotive Aftermarket: Online E-

    retailing

    At present, the automotive aftermarket sale channels is fronted by traditional stores and garages. This majorly falls (53% in FY2018) under the unorganized sector.

    Taking in consideration factors such as increase in the spending capacity, changing consumer

    behaviour, penetration of technology, e-commerce and most importantly; need for an organized

    market. Online e-retailing will soon be a business disruptor for this sector. It has already been observed in western countries and developed markets.

    2% 3% 3%

    4% 4%

    4%

    0%

    2%

    4%

    6%

    2015 2016 2017 2018 2019* 2020*

    US Online sales of auto parts and

    accessories 2015-2020

    Revenue from online sales of auto parts *Projected

  • 14

    Trends in Automotive Aftermarket : Online E-

    retailing

    In 2014, the online auto aftermarket in India was estimated at around USD20 million (less than one percent 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 speedy growth of organized and independent workshops along with customers being positively disposed towards them.

    Recent advancements in the online automobile aftermarket include:

    Online autoparts marketplace

    SparesHub.com has raised INR2

    crore from Singapore-based

    Anthill Scale Ventures, US-based

    Esvee Technologies, Chennai

    Angels and other high net-worth

    individuals (HNIs).

    Boodmo – an online

    marketplace for auto

    components (Ukrainan

    company) – has ventured into

    the Indian Markets. It aims to

    organize the replacement parts

    market and ma