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outcome translated to independent decision-making, curbing the say of mechanics who earlier are known to have had the power to push a particular brand.

The change is also driven by commodity prices. “And the commodity prices went through the roof. Yes, it doubled in some cases, and tripled too. It manifested the selective procurement of commodities where prices soared, and resulted in supply-side moderations,” admitted Kher. The industry as a whole, wiping off counterfeits from the aftermarket also encouraged buyers to lookout for genuine spares in addition. This involved a mammoth exercise with efforts involved in creation of new and modern packaging, holograms printed through quality vendors in a bid to make it tougher for the grey market to replicate originals. Brushing aside a brew of consolidating trends on the path to organising the aftermarket segment, Kher quipped, in the aftermarket, where there are umpteen business models, consolidation was near impossible. The absence of data is the biggest detriment, he pointed.

Streamlining the value chain

In the aftermarket, the value chain relies on the distributor. “He’s the primary node where we bill the materials, and then it goes to the retailer from where it is further distributed to the mechanic,” clarified Kher. This is at the core of the aftermarket model and will take some serious doing if it were to be altered. However, the disruption could stem from a transition of this B2B model to a B2C model wherein the aftermarket players deal with the customer directly. This could in turn imply direct sales through an aftermarket player’s website and so forth, he explained. Startups here, could enforce this transition faster over the more conventional players. A layer could emerge where the startup would purchase the spares from the tier 1 supplier and reach it to the garage instead in an attempt to streamline. This attempt could result in partnerships fructifying at a macro level. Its relevance to the supply chain has skyrocketed in the eyes of Kher. The elimination of middlemen has also had a direct bearing on the gross margins, he confirmed.

A stable outlay

The growing electronic content per vehicle has had the company in good stead. True to its forte, the offerings are being tailored to enhance on road safety as a priority focus area. However, Kher ruled out any major tipping point or for that matter an inflexion point for the aftermarket. With the vehicle parc rising, the growth of the aftermarket is secured. The used car market doubling in the past three years, driven by the soaring prices of new two-wheelers primarily and fourwheelers following suit. The long delivery time lines are also among the reasons driving the shift in personal mobility preferences, he said.

On the growth proposition, Kher added that the focus continues to be on growing the market share of the existing product range. To support this approach, the company is well aware of the key contributors like the distribution channel can bring in. Building a robust network continues to be a high priority focus area for the Uno Minda Group. This will require constant engagement with the distribution channel to the extent of sharing a fiveyear road map to win their confidence. “This is the only way forward,” he concluded. ACI