Auto component maker Anand Group on Wednesday said it has joined hands with South Korea's HL Group to provide a wide range of aftermarket components for the passenger vehicle segment in domestic and international markets.
The companies have formed a joint venture (JV) - HL Anand Automotive Parts Pvt Ltd - under which two dedicated distribution centres will be set up in the next two years.
The JV plans to add around 1,200 new SKUs (stock keeping units) in the next two years, Anand Group said in a statement. The new JV would help increase the size of the Indian firm's aftermarket business two-fold while building the Korean entity's presence in India, it noted.
The JV will expand the aftermarket portfolio with products manufactured by Anand Group's existing JVs with HL Group's Mando Corporation, an automotive components leader based in South Korea, it added. The existing partnerships between the two entities are HL Mando Anand Automotive Pvt Ltd, which makes steering, brake, and suspension systems, and Anand Mando eMobility Pvt Ltd that manufactures motors and controllers for EVs.
"This strategic JV with HL Group will significantly expand our aftermarket business in both domestic and international markets. The JV will capitalise on the strong ANAND Group aftermarket ecosystem in India and HL Group's sourcing expertise and well-established global network," Anand Group Co-COO Mahendra Goyal said.
With this alliance, the company expects its aftermarket business to grow at a compound annual growth rate (CAGR) of 15 per cent over the next five years, he added.
The company will focus on the core products manufactured by the existing JV entities and will be free to source other products, as feasible, for growth, Goyal said. This JV will be selling HL Mando and Anand co-branded products, building on the brand strengths of both partners, he said.
"The coming together of HL Group, a visionary industry leader in Korea with an extensive global presence in auto and other sectors, and ANAND, with its India-wide aftermarkets network, will be a positive for both businesses and help expand the opportunity-rich Indian aftermarket sector overall," Joon-Bom Kim, CEO of HL Holdings said.
According to industry estimates, India's auto aftermarket, which is growing at around 10 per cent annually, is pegged at Rs 85,000 crore, while the global aftermarket is estimated at USD 408 billion.