Indian aftermarket to touch US$ 16.5 billion by 2021; double figure growth likely

Chennai: After two years of lull, the Indian aftermarket is back in the growth track. The $7 billion industry is expected to grow at around 10-15 per cent. The industry is also expected to see a huge consolidation, say industry representatives.

R Dinesh, chairman, Auto Serve 2016 and Joint Managing Director, T V Sundaram Iyengar & Sons Pvt Ltd said that on Friday the industry after seeing downturn has started picking up. If the new vehicle market continues to grow at 7-8 per cent, which is happening now, then aftermarket would grow at around 10-12 per cent to become $16.5 billion by 2021.

He added, the industry and government should work closely to identify policies that would help the aftermarket.

Increasing stock keeping units, technical capabilities due to advancements in vehicles and investments in new generation equipment to support evolving technologies are some of the key challenges for the industry. India has advantage to create unique model.

He noted, of the total $7 billion aftermarket, currently passenger car contributes around 30 per cent, which used to be 10 per cent five years ago, while CV industry contributes around 30-40 per cent, while the balance comes from the rest.

According to CII and Frost & Sullivan report on After Market, which was released in the Auto Serve Conference, which was organised by CII here, poor condition of roads causes of wear of parts, which means a faster replacement cycle translates to higher demand for parts in the after market.

Regular scheduled vehicle maintenance, of the owners; around 90 per cent do regular maintenance to improve performance and life of the vehicle. This would be another driver, however around 22 per cent of the owners report that they do not follow the manufactures recommended schedule for maintenance, as they find it to be too expensive and frequent.

The increasing vehicle age and miles driven and steady increase in car PARC, which is forecast to grow by around 13.4 per cent until 2021 and this will also drive demand for parts in the aftermarket.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.