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.
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.”
Nissan India’s 10-point buyer insurance program is designed to provide “all the protection and peace of mind you need” with features such as “near-cashless accident repairs” throughout the dealer network plus a guarantee that only Nissan genuine parts will be installed in keeping with a “transparent, hassle-free and quick turnaround time.”
Nearly 70 percent of Indian car buyers shift to local independent aftermarket service centers within two years of making their purchase, according to automotive and transportation principal consultant Avijit Ghosh at Frost & Sullivan. “Global automakers operating in India are looking to source parts locally in order to cut costs in a market dominated by cheap small cars, thus opening up new growth opportunities for part providers.”
An annual growth rate of 12.4 percent in manufacturer-level parts revenue is expected to culminate in a $16.5 billion Indian aftermarket by 2021. Ghosh says demand for routine maintenance parts such as motor oil, wiper blades and brake pads will increase at least 10 times faster across India than in North America and Europe.
At present, however, the independent aftermarket is beset by a series of challenges that include a proliferation of counterfeit components amounting to 45 percent of the nation’s aftermarket parts sales.
“The price-competitive unorganized sector – which does not adhere to government stipulations and to a large extent does not pay excise duties and sales taxes – eats into the revenues of organized aftermarket participants,” says Ghosh. “IAM (independent aftermarket) suppliers can assist their service partners in seizing this opportunity by providing high-quality parts at a lower price. The anticipated inclusion of a section on aftermarket standards in the Motor Vehicles Act will help reduce the sale of counterfeit components.”
As this scenario unfolds OEMs are pushing their respective dealer showroom sales prospects by becoming actively involved in ensuring that their customers are assured of obtaining prompt and proper repair options.
Lifetime partners
Ford India’s network of 341 sales and service facilities in 186 cities across the country is highlighting a fixed-price “Happy Pocket Service” program that covers routine maintenance needs such as oil, filter and gasket replacement along with the associated labor costs. Car washes are included as well. Vehicle report cards, roadside assistance, 90-minute quick service bays and mobile service vans are other initiatives.
Seeking to double its Indian market share by 2020, in July General Motors announced that it is making $1 billion in additional investments – augmenting the $1 billion it has spent in India since 1996. The influx of funds is expected to create about 12,000 new jobs for GM India and its suppliers while growing the Chevrolet dealer network to support greater availability of vehicles and services throughout the nation.
“Chevrolet is committed to India for the long term,” says GM CEO Mary Barra, who has visited the country twice during a 12-month period. “We are delivering on our promise and doubling our investment in India. This will allow us to provide our Indian customers the great vehicles they want and the world-class customer experience they deserve. It will also support the government’s ‘Make in India’ program.”
GM India plans to roll out 10 new locally produced Chevrolet models within the space of five years. They include the Trailblazer SUV, which went on sale in October 2015, and the Spin MPV (multi-purpose vehicle), scheduled to reach the market in early 2017.
The SAIL hatchback and sedan, introduced into India last year with “taut ride and handling suited for Indian roads,” comes with a Chevrolet Complete Care program that includes the Chevrolet Promise, offering assured low cost of maintenance, exclusive warranty packages, Chevrolet U-First customer-centric programs and applications, and the company’s 24/7 Roadside Assistance Program, which is free for three years with all new car purchases. Roadside assistance is also available for existing customers at a nominal cost provided the vehicle is not more than five years old.
GM India has also developed digital applications such as the Chevrolet Service Estimator Online tool that is available on Chevrolet India’s website and helps calculate periodic service costs, plus the MyChevroletIndia mobile app, which aids in locating and contacting the nearest authorized Chevy service center.
In August Hyundai Motor India launched an “Always Around” offering at 470 facilities, with plans to cover 8,000 locations by the beginning of 2016. Bearing the motto of “You’re never far from us,” it provides free comprehensive 18-point checkups, coolant and oil top-offs, and a dry wash for the vehicle.
“The Hyundai ‘Always Around’ campaign is an initiative to enhance the satisfaction levels of our customers,” explains Rakesh Srivastava, senior vice president of sales and marketing. “Our vision is to be the lifetime partner of our customers, and we would like to offer a premium Hyundai experience at all the touch points.”
Umbrella programs
Aiming to ease driver anxieties over the country’s ferocious rainy season, Maruti Suzuki India’s “Monsoon Fit Check” is available at 3,500 facilities in more than 1,450 Indian towns and cities. Reaching 14 million-plus vehicle buyers befitting the automaker’s 45 percent market share, “the monsoon season is just one of the several opportunities to connect, engage and educate on the importance of vehicle maintenance and safety,” notes executive director Pankaj Narula. “With Monsoon Fit checkup we expect to target our large customer base and provide them with the maximum benefit and services. Such campaigns also help us drive in customers who may have been inactive in getting their Maruti Suzuki cars serviced regularly.”
Under the umbrella campaign of “Be Aware for Safety and Complete Car Care,” throughout 2014-15 some 6,300 “Customer Connect Camps” have been conducted by the company. “Through such customer connect initiatives we try to raise awareness on importance of regular maintenance of the cars,” Narula reports. “We also sensitize customers on use of genuine parts to keep their cars in top operational performance.”
In July Maruti Suzuki rolled out a new NEXA premium sales channel that will introduce nearly 100 new deluxe showrooms over a six- to eight-month inaugural period. Designed to attain 2 million in annual unit vehicle sales by 2020, NEXA’s immediate plan is to hire close to 2,500 “relationship managers” recruited from the ranks of customer-centric industries such as aviation, hospitality and financial services.
Managing Director and CEO Kenichi Ayukawa points out that the “Indian market and Indian society are rapidly changing and new segments of customers are emerging. We have to take new initiatives to meet diversifying expectations from our customers.” NEXA “will be able to cater to a broader range of customers who value pampering, innovation and a personal touch in their car-owning experience.” The initial NEXA offering is the S-Cross, India’s first premium crossover vehicle, which made its debut in August.
Subscribe to Aftermarket Business World and receive articles like this every month….absolutely free. Click here.
