Acma ppt feb_8_ver_4_0_edit

Indian Automotive Aftermarket Study Book 2011
&
White Paper on Legislative Improvements to
combat counterfeiting

Press Conference
February 11, 2011; New Delhi

About the Report

• Vehicle parc estimation from 50 RTOs in India (first ever)

• 3000 auto component dealers, retailers, mechanics &
workshop managers interviewed.

• Primary Research findings till 31st March, 2010

• Insights on distribution structure of auto components, rural
automotive aftermarket and key trends in the aftermarket.

Page 2
Automotive Component Manufacturers Association of India 22

Contents of the Report
• Automotive Industry & Auto Component Industry
• Vehicle parc data
- State wise
- City wise
- Segment wise (2 wheelers, 3Ws, PVs, CVs, Tractors)

• Size of the Indian Auto Aftermarket
- Segment wise
- Age wise
- Geographical distribution

• Taxation, Legal & Regulatory Environments & its impact
• Rural aftermarket & Industry Trends

Page 3

The Indian Vehicle Industry
• Production of ‘on road’ vehicles
2008 : 11.1 mln
2010 : 17 mln
• 2 Wheelers & PVs : High potential domestic market segments

• Largest 3 Wheeler & 2nd Largest Two Wheeler Market, only
behind China

• 4th Largest Car Market in Asia

• 4th Largest Tractor Market in the World

• 5th Largest Commercial Vehicle Market in the World

• 5th Largest Bus & Truck Market in the World
Page 4

Indian Auto Component Industry
120
100.2
(In $ billion)

80
60.6

40
25.7 27.5

9.4 12.8
8.4
4.3 3.8
0
2009 2015(E) 2020(E)

Domestic Aftermarket Export Domestic OE

• Current Market share
- OEM: 76%
- Exports: 11%
- Aftermarket: 13%

• Organized sector in India contributes to more than 85% of
country’s total production of auto components
Page 5

On-road Vehicles Parc – All India
All India Vehicle Parc as on March 31, 2010
2Ws 72,092,421
Total vehicle parc – 94.7 mln
2W share – 76%
3Ws 3,475,351
PVs 14,530,412
CVs 4,630,170
Total 94,728,354
Base: 94.7 mln

On Road Vehicle Market share (%) : 2020 PV
15%
CV
5%
PVs – 21% 3Ws
4%
2Ws – 73.5%

2Ws
76%

6
Automotive Component Manufacturers Association of India

Vehicle Parc - Age Profile

Age of Vehicle 2Ws 3Ws PVs CVs

0 & <= 2 years 28.22% 22.05% 33.00% 25.29%
>2 years & <= 13
66.36% 70.63% 63.02% 68.06%
years
> 13 years 5.42% 7.32% 3.98% 6.65%

• 33% of PVs on road are <= 2 years of age (3.3 million cars were sold in
the last 2 years)

• More than 20 million 2Ws have been sold in the last 2 years. 28% of 2
Wheeler vehicle parc < 2 years.

7
Automotive Component Manufacturers Association of India

Vehicle Distribution Across States
2Ws 3Ws PVs CVs
Gujarat Maharashtra Maharashtra Maharashtra

Maharashtra Gujarat Delhi Gujarat

Tamil Nadu Kerala Gujarat AP

UP AP Karnataka Rajasthan

AP UP Tamil Nadu Karnataka

Contribution 51% Contribution 66% Contribution 49% Contribution 44%

Note: Contribution figure is with respect to All India Parc

• Maharashtra – Largest Vehicle parc across categories

• Delhi - PV parc - 1.7 mln

• Rajasthan - 4th spot in the CVs category

Page 8

Vehicle Distribution Across 44 Cities
% Contribution of 44 cities to all India • 34.8% of total 2W parc (80 by the slide line)
vehicle parc.

2Ws 2Ws, 34.8% • Robust 2 Wheeler sales in Rural areas accounting for
uniform 2 Wheeler distribution across country
3Ws 3Ws, 32.8%
• PVs concentration in metropolitan and urban areas
CVs CVs, 34.4%
• Delhi share of overall PVs population in India – 12%

PVs PVs, 50.7%

0.0% 20.0% 40.0% 60.0%

• Uniform parc. Of 3 Wheelers across India is an important part of last mile distribution

• 34.4% of CVs on Indian roads are present in 44 cities

• CV hubs are generally present just outside major industrial hubs

Page 9

Off-road Vehicles - Tractor Parc
700
604
600
Tractor parc.
Volume (In thousand)

500

400 345
312 309 302 318
275 260
300
227 222 208 203
200

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Note – UP includes Uttarakhand

• Largest market share in the world

• Total Tractor parc. In India – 3.5 mln.

• 11 states comprising 92% of the overall
Less than 10% of Indian farmers owning tractors indicates huge market
potential

Page 10
Automotive Component Manufacturers Association of India 10 10

Automotive Aftermarket

PVs
26%

3Ws
46%

CVs
2Ws 25%
3%

•Total Size – INR 330 bln.; 2Ws – 46%; 3Ws – 3%

•PVs and CVs have similar shares with 26% and 25% respectively

Page 11

Aftermarket – Vehicle Segment Distribution
Base : INR 248 bln

Base : INR 82 bln

• Labor Cost – INR 82 bln
Component replacement - INR 248 bln

• Labour cost disproportionately low for 2Ws

• 2Ws contribute around 50% to the total vehicle components’ aftermarket
and around 33% to total labor aftermarket

Page 12

Automotive Aftermarket – State Distribution
Top States:
2Ws:
Gujarat - INR 14 bln
Maharastra - INR 13.9 bln
Tamil Nadu - INR 13 bln

3Ws:
Maharastra – INR 1.2 bln
Gujarat – INR 0.9 bln
Kerala – INR 0.85 bln

Combined market share – 47% of the total 3Ws market
PVs:
Delhi – INR 7.2 bln

Combined market share – 36% of the PV segment
CVs:
AP – INR 4.3 bln

Combined market share – 31% of total CV segment

Page 13

Automotive Aftermarket – Top Cities
• Amongst cities Delhi has the highest potential market size for
2Ws components with an aftermarket size of INR 5.5 bln. The
other major cities are Chennai, Bangalore and Hyderabad in the
same order

• Mumbai with the highest 3W parc carries the most potential for
3W components’ aftermarket. Hyderabad and Chennai follow

• Delhi is way ahead of million plus cities in PV segment with an
aftermarket potential of INR 7.2 bln. The next city is Mumbai with
an aftermarket potential of INR 2.9 bln

• In CVs segment Delhi at INR 1.8 bln, Chennai at INR 1.7 bln
followed by Bangalore at INR 1.5 bln are the leading contributors
among surveyed cities

Page 14

Future Trends
• India will emerge as a small car manufacturing hub with
more sales of vehicles likely across categories.
• Used vehicle market expected to grow in India with many
OEMs launching their used car ventures
• High fuel prices will force vehicle manufacturers to offer
alternate fuel vehicles
• Emission and Safety standards will force component and car
manufacturers to invest in technology.
• With increased use of electronics in vehicles the importance
of diagnostics to go up
• Changing distribution and servicing structures will also add
to dynamism in the Indian automotive aftermarket

Page 15

Counterfeits and Fakes in Automotive Aftermarket

Page 16

Counterfeits and Fakes in Automotive Aftermarket
Imports
Independents
8%
Manufacturers Counterfeits
15% 36%

OE suppliers
19%
OEMs
22%

• In India fake auto parts command a significant market share of the total
aftermarket

• Latest estimates put contribution of fake components at 36% of total value

• Auto components most susceptible to counterfeiting are filters, bearings,
steering arms, tie rods, brakes, brake linings, bumpers, alternators, wipers
and lamps

Page 17

Impact of Counterfeiting

• It is estimated that government loses INR 22 bln per annum due to sales
of counterfeit automotive components

• The loss to the exchequer occurs because firms involved in
manufacturing of fake parts do not pay taxes

• In most cases the consumer is not aware that he is buying fake parts as
the finishing & packaging closely imitates original products

• Also cases where consumers buy counterfeit components to save on
costs

• Study indicates, around 20% of total road accidents either directly or
indirectly attributed to use of counterfeit components

Page 18

ACMA initiative to Tackle Counterfeit
• Common Raids under the umbrella of ACMA – During the years
2009-10, 439 raids were conducted and a number of infringers
were arrested

• The raids have served the purpose of:
– Creating awareness
– Enhancing cost efficiency
– Intensifying activities in highly infected markets
– Eliminating the possibility of isolation of individual companies by
retailers
– Leveraging better support from govt. and aftermarket associations

• Asli-Naqli Stall Campaigns in the Exhibitions –Member companies
educate customers on how to differentiate genuine from their fake
parts

Page 19

ACMA initiative to Tackle Counterfeit

• Road Shows for the benefit of traders and mechanics in interiors
who cannot travel to exhibitions in urban areas

• Educational Program for member companies – awareness
programs for it’s member companies on IPR, copyright,
trademark, design and patent

• SMS Campaign – started an SMS campaign which educates
traders, mechanics and end users on the importance of using
genuine parts

Page 20

Limitations of existing laws

• Lack of product specific Laws to combat spurious auto
components

• Current laws do not provide for ‘suo moto’ action by
Government or Government agencies

• Contract Act, Sale of Goods Act, Consumer Protection
Act and Intellectual Property laws have different focus,
intent and purpose

• Motor Vehicles Act and the Certifying agencies are
ideally positioned to address the problem

Page 21

Key Recommendations
• Re-orient Motor Vehicles Act also as Automotive Components anti counterfeit and
Product Safety Law by changes to preamble to the act .
• Define counterfeit or spurious auto components in a comprehensive way .
• Provide the Motor Vehicles Act that offences in connection with manufacture,
packaging, sale, stocking, distribution etc., of spurious auto components will be
considered as cognizable and non-bailable. Also for summary trial of such offences.
• Accord to the state a proactive role and a ‘suo motu’ authority to monitor, initiate
prosecution for offences in connection with the manufacture, packaging, sale,
stocking, distribution etc., of spurious auto components and for this purpose establish
machinery within the Motor Vehicles Act.
• Bring clarity that Motor Vehicles Act is intended not only to regulate completely
assembled vehicles and parts fitted to completely assembled vehicles but also to
components used or intended for use in vehicles supplied or procured from the
automotive aftermarket.
• Notify that Section 109 to Section 111 of Chapter VII shall equally apply to automotive
components manufactured or sold or serviced in the aftermarket.

Page 22

Need for State Level Enforcing Agency
• Create state level enforcement agency with adequate
supervisory powers to deal with persons engaged in the
manufacture, storage, packaging, distribution and sale of
counterfeit or non standard automotive Component. Similar to
the Weights and Measures Act, inspectors and other officers
be empowered to search, seize any non complying auto
component and also punish the offenders.
• Motor Vehicles Act should lay down standards for more and
more safety, pollution and emission related automotive
components.
• Facility of toll free call number in each district or state which
can be contacted by any whistle blower if he comes across
any one in the chain of spurious or fake automotive
component.

Page 23

ACMA Members’ Survey Findings

Suo motu action by Government Improvement to current legislations

Page 24

Thank You !

Page 25

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