Auto aftermarket likely to grow to 44,000 crore by 2015
Auto aftermarket likely to grow to 44,000 crore by 2015
McKinsey report which was released on Friday says that Indian Auto aftermarket is on a high which will help it in growing further to almost Rs 44,000 crore. The Indian automobile aftermarket is growing by 11 per cent every year to Rs 24,000 cr. as compared to present worth of Rs 19,000 cr. The growth in the domestic market can be credited to the increasing demand for the vehicles and also expansion of the new independent and foreign auto players investing in the market. Opportunities in the Indian automotive aftermarket, a report released in Chennai at a three day "AutoServe 2010" conference organized by the Confederation of Indian Industry (CII) says that, though the industry's present margins are appealing, the existing New Cars makers may experience a decline in their margins to a level which is mostly witnessed in the developed economies. The report also reveals that, the global auto aftermarket is expected to be almost $540 billion. If the auto players have to maintain the profitability, it is vital that these automobile manufacturers make additional ways to sustain value, for instance, by service network expansions, manufacturing branded parts, and more. The report made an excellent point and stated that, if the revenue generated from the markets remains handsome and if the auto biggies are able to follow the planned strategies, it will be a profitable sector. It includes the manufacturers, distributors, retailers, service provider and garages. As per the reports, the unoriginal parts accounts to 30 per cent of the aftermarket. The commercial vehicles which include the multi axle vehicles, LCVs, buses and trailers, account to almost 22 per cent of the sector. However states like Tamil Nadu, Maharashtra, Gujarat and Kerala alone accounts for more than 40 per cent. The auto sector captures 34 per cent. New Delhi, Andra Pradesh, Maharashtra and Tamil Nadu captures 40 per cent of the aftermarket of the vehicles. In the auto sector, two wheelers hold the largest, 44 per cent of the whole of the aftermarket which includes states like TN, Gujarat, Maharshtra, Uttar Pradesh which account for 45 per cent. If the two wheelers sales grow this market also grows.