1. Enhancement of online presence is gaining traction among the existing players
Trends and Developments in Two-wheeler Aftermarket Services
Online Ecosystem
COVID-19 era has witnessed businesses strengthening their digital presence in order to attract consumers as their preferences have shifted from availing services through face-to-face interaction to an online experience. Therefore, automotive aftermarket firms must enhance their digital presence in order to gain visibility among consumers as well offering end to end information’s on their platform.
- The two-wheeler aftermarket service and spare parts companies are expanding their digital presence for better visibility among consumers and compete on the basis of brand integration followed by the advent of COVID-19.
- Multi-Brand players such as Hoopy and Garage Works among others have initiated the process of online booking and extending doorstep two-wheeler services to enhance customers convenience.
2. Positive Impact of Reverse Migration during Covid-19
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Due to the COVID-19 pandemic, the capital of a lot of the local garage/unorganized outlet owners were wiped off permanently due to closure of business. Many workers stopped working due to fear of infection which were around 94.7%. Many stopped working as their working site were shut down or closed due to government regulations. As a result of which various daily wage workers from local garages have migrated back to their natives thereby, reducing the accessibility of local garages in comparison to the pre-pandemic time period. This has positively impacted the scope for organized multi-brand players such as Hoopy and Garage Works looking to enter the space and expand its customer base.
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3. Rise in import duty for spare parts such as engine and transmission among others to 15%, serve as an opportunity for boosting domestic auto ancillary manufacturing industry in India
Automotive Mission Plan 2016-2026
- Automotive Mission Plan (AMP) 2016-2026 seeks to outline the trajectory of the advancement of the automotive, two-wheeler and supporting industries such as spare parts ecosystem in India.
- The rise in duty on specific items such as engine & transmission parts amongst others from 7.5-10% to 15% as proposed in the Union Budget FY’20 is expected to boost domestic manufacturing since most of the component manufacturing units are small and medium enterprises (SMEs).
- There is also a reduction in the corporate tax rate to 25% for SMEs with a turnover of less than INR 2,500 Mn annually will benefit the auto ancillary industry in India.
- The country is anticipated to be among the top three automotive industries in the world by 2026. Optimistic outlook for the growth of the automotive and two-wheeler industry contributes in enhancing the business potential for aftermarket players in the ecosystem.