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Indian Automotive Component Aftermarket Distribution Channel
More Vehicles and Poor Roads Signal Growing Demand for Aftermarket Parts
In the last decade, more than five million passenger, multi-utility, and commercial vehicles were
sold in India. Unfortunately for their owners, the poor roads on which these cars are driven and the
low-quality fuel that they consume are leading to rapid wear on steering, suspension, brake, and
engine systems. As a result, owners will be forced to repair and replace a wide
variety of parts, thereby accelerating demand for aftermarket components.
This Frost & Sullivan study offers in-depth analysis of Indian distribution channels for aftermarket
automotive components. It examines what type components are sold in addition to location,
method, and vendor. By providing
detailed discussions of major and alternative brand distribution systems as well as imported and
spurious components, this research gives its users an unparalleled study of the field.
Competitive Pricing Strategies Crucial to Aftermarket Penetration
There is strong potential for both vehicle manufacturer (VM) components and component
manufacturer (CM) parts in the Indian aftermarket, says the study's author. Nevertheless, VMs and
CMs compete against one another as
well as with alternate brands.
Vehicle manufacturers and CMs need to adopt a pricing policy that takes into account the buying
power of the Indian consumer, says the author. Coupling lower prices with more efficient
distribution should help VMs and CMs
penetrate more effectively into the marketplace. This report examines industry trends and identifies
winning strategies, enabling your company to formulate a successful business plan.
Counterfeit Products Threaten Revenues
Counterfeit components account for as much as 45 percent of passenger car aftermarket sales and
15 percent of commercial vehicle aftermarket sales, reports the author. Suppliers and mechanics
play a major role in the promotion of spurious components. Although customers are usually unable
to distinguish between an original and a spurious part, the use of these products
is impacting CM and VM revenues.
Over the long term, the threat of spurious parts should diminish as stricter legal penalties are
implemented, and CMs and VMs work to increase customer awareness. With its identification of
industry challenges and its effective strategic recommendations, this research can help your
company optimize resources, maximize gains, and overtake the uninformed competition.
Ashok Leyland Ltd.
Bajaj Auto Ltd.
Bajaj Tempo Ltd.
Daewoo Motors Ltd.
Eicher Motors Ltd.
Eicher Tractors Ltd.
Fiat India Auto Ltd.
Ford India Ltd.
General Motors India Ltd.
Hero Honda Motors Ltd.
Hindustan Motors Ltd.
Honda Siel Cars India Ltd.
Hyundai Motor India Ltd.
Ideal Jawa (India) Ltd.
Kinetic Engineering Ltd.
Kinetic Honda Motor Ltd.
Maruti Udyog Ltd.
Punjab Tractors Ltd.
Royal Enfield Motors
Scooters India Ltd.
Swaraj Mazda Ltd.
Tata Engineering Ltd.
Tractors and Farm Equipment Ltd.
Volvo India Pvt.Ltd.
George Oakes Ltd.
India Motor parts and
Agency (Delhi) Ltd.
Madras Auto Service
Siyaram Sales Ltd.
Automotive Component Manufacturers
Association of India
Society of Indian
Asahi India Safety
Bharat Forge Ltd.
Bharat Gears Ltd.
Brakes India Ltd.
Denso India Ltd.
Escorts Mahle Ltd.
Fenner (India) Ltd.
Gabriel India Ltd.
Goetze (India) Ltd.
India Pistons Ltd.
Jay Bharat Maruti Ltd.
Lumax Industries Ltd.
Munjal Showa Ltd.
NRB Bearings Ltd.
Omax Autos Ltd.
Premier Instruments & Controls Ltd.
Purolator India Ltd.
Rane Engine Valves Ltd.
Rane (Madras) Ltd.
Rico Auto Ltd.
Shriram Pistons &
SKF Bearings India Ltd.
Sona Koyo Steering
Timken India Ltd.
Contents: 1. Executive Summary
A. Executive Summary
B. Introduction to the Indian Automotive Component Aftermarket
1. Summary of Major Findings
a. Distribution Structure
b. Source of Components
C. Key Conclusions
2. Market Engineering Research Methodology
A. Market Engineering Research Methodology
B. Research Scope
C. Research Methodology
D. Glossary of Terms
3. Automotive Component Aftermarket
A. Automotive Component Aftermarket
B. Market Overview
C. Definitions and Market Segmentation
a. Vehicle Manufacturer Brands
b. Component Manufacturer Brands
c. Alternate Brand Manufacturer
d. Spurious Part Manufacturers
D. Market Segmentation
1. Segmentation Based on Vehicle Use
a. Aftermarket for Components for Use in Passenger Vehicles
b. Aftermarket for Components for Use in Commercial Transport Vehicles
2. Segmentation Based on Component Type
a. Aftermarket for Engine and Engine Parts
b. Aftermarket for Drive, Transmission, and Steering Parts
c. Aftermarket for Suspension and Braking Parts
d. Aftermarket for Electrical Parts
e. Aftermarket for Equipment
f. Aftermarket for Other Parts
3. Segmentation Based on Type of Source of Manufacture of Component
a. Vehicle Manufacturer (VM) Brands
b. Component Manufacturer (CM) Brands
c. Alternate Brands
d. Spurious Parts
E. Industry Challenges
1. Affordable Pricing Is Crucial to Penetrate the Aftermarket
2. Managing Distribution Is Important to Prevent Market Share Erosion
3. Counterfeit Products Cause Revenue Loss
4. Power and Influence of Mechanics Adversely Impacts VM and CM Brands
5. Alternate Brands Offer Strong Competition to the VM and CM Brands
6. Competitively Priced Imports Lead to Decline in Market Share
7. Competition From Vms Would Adversely Affect Cms
8. Influence of Retailers Adversely Impacts VM and CM Brands
9. Cyclic Nature of OE Demand Causes Severe Competition in the Aftermarket
10. Shift in the Preference of the Car Owner
Toward Authorized Service Channel Would Affect Cms
11. Market Drivers
12. Market Restraints
F. Other Market and Technology Trends
1. Owners of New-Generation Cars Want Quality Parts
2. Channel Members in the Aftermarket Are Not Geared to Meet the Diverse Part Needs of a Large
Number of New Vehicle Models
4. Automotive Component Aftermarket Distribution Channel Overview
A. Automotive Component Aftermarket Distribution Channel Overview
B. Distribution Channel Members
1. Exclusive Distributor
2. Exclusive Stock list
3. Vehicle Dealerships
4. Multiple Brand Distributors (MBD)
5. Multiple Brand Stock list (MBS)
9. Salvage Yard
10. International Parts Manufacturers
C. Indian Automotive Component Aftermarket Distribution Channel Structure
1. Distribution Structure of Component Manufacturer Brands
2. Distribution Structure of Vehicle Manufacturer Brands
3. Distribution Structure of Alternate Brands
4. Distribution Structure of Spurious Brands
D. Distribution Operations of Leading Component Brands
3. Kirloskar Oil Engines Limited
5. Kalyani Brakes
6. Rane Luk
7. Vir Rubber
E. Major Automotive Component Markets in India
1. Characteristics of Some Major Automotive Markets in India
F. Trends in the Distribution Structure
1. Increased Competition in the Aftermarket Is Prompting Companies to Adopt Parallel Distribution
2. Parallel Distribution Has Given the Retailers the Power to Choose Suppliers
3. The Pressure on Prices Is Causing a Compression of the Distribution Chain
4. The Growing Prominence of the Authorized Service Channel Is Affecting the Distributors,
Wholesalers, and Retailers in the Independent Aftermarket
5. Large End-User Groups Are Pooling Their Buying Power
7. Emergence of Large Retail Chains
5. Distribution Channel Member Analysis
A. Distribution Channel Member Analysis
B. Exclusive Distributors
C. Exclusive Stock list
D. Vehicle Dealerships
E. Multiple-Brand Distributor
F. Multiple-Brand Stock list
1. Large Retailers
J. Comparative Analysis of Channel Members
1. Number of Outlets
3. Key Decision Variables
a. Equal Terms of Trade
b. Presence of Alternate and Spurious Parts in the Line
c. Sales Support
d. Payment Terms
e. Reliability of Supply
f. Brand Equity
g. Profitability of the Line
K. Profile of Key Channel Members
1. Distribution Structure
2. Competitive Strategies
6. Vehicle Manufacturer's Component Distribution System
A. Vehicle Manufacturer's Component Distribution System
1. Network Infrastructure
2. Independent Aftermarket-Oriented Network
3. Authorized Service Channel-Oriented Network
C. Type of Orders
1. Routine Orders
2. Special Orders
D. Order Cycle
E. Inventory Management
F. Credit Terms
G. Discount or Margin Structure
I. Warranty Policy
J. Damage and Rejection Policy
K. Lead Time
L. Fill Rate
M. Promotional Programs
7. Component Manufacturer's Distribution System
A. Component Manufacturer's Distribution System
B. Distribution Network
1. Distribution Approach
C. Type of Orders
1. Inventory Management
2. Credit Terms
3. Discount Structure
5. Warranty Policy
6. Damage and Rejection Policy
7. Fill Rate
D. Lead Time
E. Promotional Program
8. Alternate Brands' Distribution System
A. Alternate Brands' Distribution System
1. Extent of Competition Offered by Alternate Brands
2. Distribution Network and Order Procedure
3. Credit Terms
4. Discount Structure
6. Warranty Policy
7. Fill Rate
8. Lead Time
9. Promotional Program
9. Spurious Parts Distribution System
A. Spurious Parts Distribution System
1. Factors Determining the Presence of Various Part Sources
2. Extent of Competition
C. Distribution Network
1. Sources of Spurious Parts
2. Mode of Operation of Channel Members Dealing in Spurious Parts
3. Geographical Distortions in the Trade in Spurious Parts
4. Credit Terms
5. Discount Structure
7. Warranty Policy
8. Damage and Rejection Policy
9. Fill Rate
10. Lead Time
11. Promotional Program
10. Imported Parts Distribution System
A. Imported Parts Distribution System
1. Imported Part Categories
2. Category 1
a. Components for Vehicle Models That Are Not Built in India
b. Components for International Vehicle Models in Which the Old Vehicle Population Is Low
3. Category 2
4. Category 3
C. Mode of Imports
1. Authorized Agent Channel
2. Independent Importer Channel
3. Illegal Channel
D. Distribution Measures
1. Pricing and Payments
3. Illegal Practices
11. Comparative Analysis of Distribution System by Component Source
A. Comparative Analysis of Distribution System by Component Source
1. Relative Prices Across Component Sources
2. Discount Structure Across Component Sources
3. The Premium End-Users Would Pay for
D. Payment Terms
F. After Sales Support
12. Impact of Regulations on the Distribution of Automotive Components
A. Impact of Regulations on the Distribution of Automotive Components
C. Regulations Prohibiting Spurious Parts
1. Present Status of the Law
2. New Trade Mark Bill,1999
D. Indirect Taxes on Domestic Components
1. Sales Tax
E. Regulations Benefiting the Small Scale Sector
1. Excise Exemption or Concession
2. Policy of Reservation
13. Impact of E-Commerce on Distribution
A. Impact of E-Commerce on Distribution
C. How E-Commerce Is Redefining Distribution of Automotive Components
1. Improved Communication
2. Savings in Inventory Carrying Cost
3. Savings in Cost of Processing Orders
4. Reduction in Order Processing Time
5. Savings in Time Due to Integrated Operations
D. Current Scenario
1. Infrastructural Challenges
a. Penetration of Computers and Internet in India
b. Current Usage of Computers and Internet by Distribution Channel Members
2. Commercial Challenges
3. Socio-Cultural Challenges
E. E-Commerce Model for India
1. Consolidation of Distributors into National Distributors
2. Emergence of Large Retail Chains
14. Strategic Recommendations
A. Strategic Recommendations
B. Factors to Succeed in the Aftermarket
C. Strategic Recommendations to Vehicle Manufactueres
D. Strategic Recommendations to Component Manufactueres
E. Strategic Recommendations to Independent Distribution Companies
F. Strategic Recommendations to Organized Retailers
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