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India’s OEMs push service plans in fragmented independent aftermarket

Friday, October 16, 2015 - 07:00
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Automakers operating in India’s volatile yet enticing new-car sales arena are aggressively upping their in-house after-sales programs in an effort to gain market share amid a hotly competitive OEM environment.

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A growing middle class and a trending younger, more affluent population are eager to cast aside bikes and scooters in favor of owning a car, but potential buyers continue to harbor concerns over the subcontinent’s rough roads, far-flung population centers and a fragmented independent aftermarket.

“The appetite for cars in rural areas has grown tremendously in recent years, and already accounts for 30 percent of the total market,” reports Credit Suisse researcher Jens Erik Gould. “As a result, it’s crucial to have a far-reaching distribution network in the country to give rural buyers confidence that they can get needed repairs in a timely way.”

High stakes are involved with India being the second most-populous country in the world; currently the globe’s sixth-largest automotive marketplace, massive sales growth is in the offing. Indians bought some 2.7 million light vehicles in 2010, compared with only 700,000 a decade earlier. “But they’re just revving up the engine,” Gould says, referring to forecasted sales of 11 million units by 2020.

Although India’s current economic situation is experiencing fits and starts, and some auto manufacturers are implementing production cutbacks, confidence in the future remains high.

“India is poised to be the third-largest market in the world by 2020, and we continue to monitor its progress closely to ensure our expanding product portfolio fits regional needs,” says Arun Malhotra, managing director at Nissan Motor India. “We will continue to invest and support the ‘Make in India’ initiative while catering to the domestic market and exploring more markets to augment our already strong exports numbers.”

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