Update on Indian auto industry
ET reported that auto industry captains are bullish on tapping the fast growing aftermarket business with almost all the global majors having entered India and production of vehicles zooming from 2 million in 1991 to 100 million in 2007 and growing at 12% a year.
Industry leaders said that customer expectations are very high and product quality and delivery are taken for granted. Quality of service will be the key differentiator for companies to retain customers. This will call for ensuring service and spare parts at their convenience and at reduced cost.
As per report, more sophisticated vehicles and manufacturing equipments have entered India. It is the largest consumer of chips, plastics, sheet metals besides in extensive computer application. There is tremendous spin off effect in terms of employment in the growth of Tier II and Tier III suppliers and aftermarket service.
Speaking at a CEO session at Autoserve 8, organized by Confederation of Industry in Chennai, they said that aftermarket will become more organized and branded and emerge as a separate revenue stream for vehicle manufacturers and OEMs with tremendous opportunities in maintenance, services and selling genuine parts.
Mr Venu Srinivasan CMD of TVS Motor and CII vice president who inaugurated the three day Autoserve 08 exhibition at Chennai Trade Centre said that the contribution of auto industry to GDP is set to grow from 5% currently to 10% by 2016. All the top seven global players are setting up plants in India and Chennai has attracted almost all the top players. He said that "While there is downturn now and recovery is expected after 18 months, I expect the auto industry to be the true growth engine and lead our growth like in rest of the world. The industry also enjoys the support of all Indian states."
Mr Vinod Dasari whole time director of Ashok Leyland said that it has its focus on 3 Cs company customer and channel. Despite the downturn, it will go ahead with its big expansion plan. It wants to improve the service market share. Nearly 70% of the service is done by people outside the dealer network. It will work with dealers to upgrade their service and increase network.
Mr Viji Santhanam MD of Brakes India said that OEMs and vehicle manufacturers have to focus on certain areas for developing the aftermarket business.
Mr Ravi Santhanam MD of Hindustan Motors said that "Aftermarket sales and service is one element of auto business that is completely recession proof. It helps companies in building brands, gives them a competitive advantage and marginal price advantage, especially for premium products."
Mr Rajeev Dubey President of M&M president said that "Aftermarket business will be driven by trust, quality and convenience. M&M is ramping up its First Choice used car business for handling multi branded models. It will leverage the symbiotic relationship within the group for providing all services including strategic sourcing, logistics and finance.
The report added that these included infusing a service mindset across the organization not only among the field staff having structured inputs from the field staff, prompt attention to address and resolve customer problem, extensive training program for dealers and field force designing and developing service tools and validating warranty claims.
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