Auto parts distribution to consolidate, says study

Auto parts distribution to consolidate, says study

New Delhi: Auto parts distribution channels are expected to consolidate as the after-market matures in India, according to a study by the Automotive Component Manufacturers Association of India (Acma) that was released on Wednesday.

The current size of the components business in the Indian automotive after-market is estimated at 24,800 crore, whereas the service market is pegged at 8,000 crore. The combined value is projected to rise to 40,000 crore by 2015 and to 60,000 crore by 2020, according to the first phase of the study in February 2011.

The aggregate after-market for the auto industry around the globe is expected to cross $1 trillion by 2012, growing at over 5%, according to the latest study.

“The two-wheeler segment with 49.7% leads the component market, followed by passenger vehicles, commercial vehicles and three-wheelers at 24.7%, 23.1% and 2.5%, respectively," said Soumitra Bhattacharya, chairman of Acma’s committee on consumer affairs and after-market, while releasing the study.

“Only 41% of the components consumed in the Indian after-market belong to OEMs and OESes (original equipment suppliers), with other manufacturers and imported parts contributing a 23% share," he added. The study also estimated that almost 36% of components in the after-market are fake.

Analysts don’t see the Indian auto component after-market maturing too quickly. “We are talking about the consolidated efforts from manufacturers across the industry, which do not seem likely in the near future," said an analyst at a Mumbai-based research firm, who did not want to be named. “The penetration in the market is still happening, and while it is growing, this kind of consolidation is not possible."

moulishree.s@livemint.com

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