The Indian domestic auto component aftermarket is expected to reach USD 14 billion by 2028, according to a report by ACMA and Ernst & Young. The aftermarket growth is expected to be fueled by the increasing number of vehicles on the road. In an exclusive interview with Outlook Business, Rakesh Kher, CEO, UNO Minda (Aftermarket Division), shares his insights about the aftermarket sector's dynamic nature. He talks about the growing inclination of the younger generation toward aftermarket products and services.
With a PAN India presence, UNO Minda's production chain is entirely based in India. “Understanding the changing trends & technology towards personalized, autonomous, connected & Electric (PACE) vehicles has always been a key area of focus. Our company remains heavily invested in the R&D to introduce new product lines,” said Kher.
The auto component company studies online sales data emerging from various digital platforms to better understand customer demographics, preferences & buying behaviour through customer engagement analytics.
Speaking on the customer's buying pattern, Kher believes, there has been a growing interest among younger demographics, aged between 18 to 35, in aftermarket products. He also notes that there has been a shift in consumer behaviour from a ‘Do It For Me’ (DIFM) to a ‘Do It Yourself’ (DIY) approach for easily installable products.
“It’s also observed that many buyers are looking for branded products and prefer that such parts are installed by the garages.”
While the market remains competitive owing to the presence of several players in the industry, UNO Minda distinguishes itself with a diverse product portfolio that includes BS6 (Bharat Stage 6) products, EV accessories, and batteries. According to the CEO, the company's offerings, which include both automotive parts and accessories, stand out as a unique combination in the aftermarket industry.
“The aftermarket segment is witnessing a surge in advancements such as sensors, onboard diagnostics, and personalized car features. These innovations guide us to invest in developing compatible products and services. said Kher.
In Q3FY24, UNO Minda witnessed a growth in consolidated revenue, reaching Rs 3,523 crore, a 21 per cent increase from the corresponding quarter of last year. EBITDA stood at Rs 380 crore, rising by 12 per cent from Q3FY23's Rs 338 crore.
The aftermarket segment contributed 8 per cent to the overall revenue growth, generating Rs. 273 crore during the quarter.
Despite the overall positive direction, rapid technological advancements and fierce competition in the industry could pose challenges to maintaining sustained growth.