The Indian automotive industry, which is bouncing back from the Covid-19 impact, is gearing up for the new normal. Experts have suggested steps to be followed by the aftermarket industry to emerge more strong and successful.
Raj Manek, Executive Director & Board Member, Messe Frankfurt Asia Holdings Ltd. said, “With mobility trends and consumer sentiments shifting in favour, Indian auto component makers must focus on upscaling their manufacturing capabilities to harness global demand and gain a strong hold in Asian aftermarkets.”
He added: “Deep localisation of supply chain in conjunction with government’s initiative for ‘Aatmanirbhar Bharat’ will also be a key prospect, as it will help the Indian aftermarket industry emerge more resilient and strongly independent in the long run.”
Expressing happiness on the better than expected recovery in the PV and Two wheeler segment, Vinnie Mehta, Director General – Automotive Component Manufacturers Association (ACMA), remained cautiously optimistic for the ensuing months after the festive season:
“There are lot of challenges ahead, especially as we are not yet out of the pandemic; local lockdowns accompanied with logistics issues continue to pose a challenge for the industry. Going forward, a stable policy and regulatory regime, with a singular benign GST rate for the auto component industry among others would provide a fillip to the sector,” Mehta said.
“With emphasis on ‘Atmanirbharta’ by the Government, the automotive industry in India is focusing on deep localisation which would not only make the industry globally competitive but also add to the benefit of the consumers by making available products of superior quality at affordable price points.” Mehta stated.
At present, the auto-components industry accounts for 2.3 per cent of India’s Gross Domestic Product (GDP) and employs around 5 million people directly and indirectly. As auto component manufacturers look for a stronger approach, localising manufacturing operations, adopting omni-channel models and focusing on collaboration would greatly help in regaining momentum in the market.
The Indian automotive sector has experienced a decent recovery in the last few months. In September, a 20% month-on-month uptick was seen in domestic sales of automobiles (apart from commercial vehicles) as greater need for health, safety and security is prompting people to buy passenger automobiles and rely less on public transportation.
Demand goes up
The increasing demand for personal mobility has also contributed to growth in fuel sales especially petrol and diesel, which is now expected to return to pre-COVID levels by the end of current financial year.
A decent year-on-year increase in GST collections of September is also telltale sign of economic recovery and resuming pace in business operations, boding well for all major industries including automotive.
With the demand for first and second-hand vehicles expanding, the need for auto repairs and servicing will increase bringing a corresponding growth in the automotive aftermarket segment. Adopting a digital model will also help businesses in aftermarkets to broaden their reach and capture demand across a wider geography.
(With inputs from Automotive Lead Research Team)
If you like this article from Automotive Lead, please feel free to share this in your social media platforms to help your contacts to understand more on this subject