Automotive aftermarket banks on electronics for Industry 2.0 push

Anchoring a panel discussion ‘Changing landscape of future automotive aftermarket value chain’ held earlier this month by CII, Ramashankar Pandey, MD, Hella India Lighting Ltd, spoke about concerns of global consolidation, opportunities, threats and the emergence of newer technologies such as augmented reality, connected and electrification of vehicles.

RG Prasad, VP & Global Head, Automotive Engineering, TCS, said there is no need to be wary as it was similar to the situation ten years ago, when the automobile was perceived as a big mechanically engineered gadget. 

Though the biggies in the business thought that the ‘Googles of the world’ would take over and start manufacturing, it is safe to assume that it’s not going to happen.  Even if the automobile biz is dissected, it only provides an opportunity for those in the value chain to find ways of integration. Those in the components business will find the zeal to excel, rather than remain a survivor.

But for that, they need to identify niche areas of specialisation, akin to mobile players making use of apps as the aftermarket provider.  “It is how we skill ourselves, whether it is telematics or businesses built over telematics,” Pandey noted.

Saurav Goyal, Head – Operations, Nn4 Enrgy, said aftermarket will stay till automobiles exist.  Electric mobility, battery management, charging infrastructure, thermal and power electronics (whole new sub sector for aftermarket) will become the new businesses which need to be adopted so that business models can tweaked on the back of new skills learnt.

Anjan Kumar, Regional President, Automotive Aftermarket Division, Bosch is upbeat: “Aftermarket business will stay relevant for at least 10 to 15 years. India is a bit different from other markets, where you have the parts business, diagnostics and services.” Business is generated mostly from parts and a negligible portion from services, he said, adding “electrification will happen but in a phased manner and increasingly in the bus segments.” 

He added, “The country’s two-wheeler segment is the biggest in the world. It will remain (70 to 80 per cent) largely conventional even after 6-8 years. We also have a huge agri segment, housing the biggest tractor market. . There are 7.50 lakh tractors being produced, making it the biggest… and growing further. It will be the last segment, may be three to four decades, to be touched by electrification.”