The Vrooming Automobile Aftermarket in Kerala

Kochi: It is no secret that Kerala is an attractive market for premium automobile manufactures. The number of BMWs and Audis that zip past one along the roads is quite high for a non-metro State. Premium SUVs and luxury sedans have become undisputed symbols of success. Premium auto accessories, performance tuning and professional detailing have also become irresistible style statements, particularly among youngsters.

Gone are the days when automobile customers were satisfied with the standard stereo sets and seat covers. Now, the industry offers myriad choices to enhance the look, feel and power of vehicles. Don’t like your car horn, change it. Don’t like your rear-view or side mirrors, get new ones. You feel your car’s steering wheel is too big, go for another. The options are numerous.

The mushrooming of auto accessories, performance tuning and professional detailing shops across small towns and cities has occurred over the last five years. Malayali remains a loyal Maruti customer even today (though Hyundai followed by Volkswagen offer tough competition) at the entry level and mid-size segments. The big change being witnessed is that now even first-time car owners – usually with entry level models or mid-size autos – also resort to fitting auto accessories, fine-tuning the engine and detailing. In the auto accessories market, the major areas of spend include audio system, lights and horns, alloy wheels, interiors detailing and exterior style accessories.
According to a study commissioned by Destination Kerala through True Code, more than 57 per cent of users (owners of vehicles manufactured between 2012 and 2016) have spent good amounts for modifying their automobile. It was found that owners in the age group 19-30 are more inclined to go for modifying the OEM spec of their vehicles.

About 52 per cent of owners have spent on modifying audio systems followed by 48 per cent on refurbishing the interiors and 38 per cent on alteration of wheels (upgrading to alloy wheels) of the vehicle. Exterior appearance is also a focus area for 42 per cent of the owners. On an average, a normal car owner spends nearly Rs. 25,000 and a premium customer about Rs. 1,20,000 on high-end auto accessories and professional detailing. About 10.8 per cent of customers invest in performance tuning to tweak stock engine performance which costs around Rs. 55,000.

Auto owners are also very keen about car care. About 53 per cent of them use a professional car wash facility monthly once and 18.5 per cent do detailing at least once in a year. About 50 per cent of car owners interviewed have signed up for a yearly detailing package. The study found that 73 per cent of car owners are using OEM alloy/drum wheels. While 82.3 per cent of them use branded alloy wheels, 46 per cent use Indian brand tires and 27 per cent use imported ones. Only 2 per cent of car owners prefer Chinese or Korean-made tires. Among the vehicle owners, 66 per cent choose a service provider based on referral. While 20 per cent pick a service provider based on their presence, 13 per cent consider range of brands on offer as the deciding factor.

“The industry has realised that it has to satisfy consumers’ demand for a digitally enhanced experience. Subsequently, to meet customer expectations, high-end vehicle manufacturers these days come out with many options like stereo, reverse camera, GPRS etc. The consumer need not necessarily go to an auto boutique to get these gadgets fitted,” says Suresh Krishnan, Managing Partner, Flamingo Motors, Kochi.

However, some customers think differently. “They believe that vehicles rolling out of production facilities lack ‘something.’ And hence, they often choose to tinker with their vehicle engine for adding ‘more power’ or ‘improving fuel efficiency’,” says Rajesh Bhaskaran, Merchandiser, Al-Ghurair Retail LLC, an automobile enthusiast and owner of four SUVs.

Lal Bharathan, CEO, Lap 47 Performance Studio, feels that it is very comfortable to handle today’s customers as they know what they need and what is available. “People now give more importance to quality and most of them prefer enhancement of the performance and efficiency of the engine,” he says.

Though the Motor Vehicles Department (MVD) is very strict about giving permissions for enhancing performance of vehicles, there is a large section of vehicle users which goes for it. Strict regulations are in place regarding the use of headlights, colour changes and car stickers. Many of these alterations or additions require prior permission of the MVD.

According to Suresh Krishnan sun roofings and ceramic coating in cars are the new trends in Kerala. ‘‘Consumers now expect an increasingly high level of comfort in their cars, particularly regarding air conditioning and sunroof. Such features are no longer the exclusive domain of luxury cars,’’ he says.

‘‘Ceramic coating is expensive and requires two days to finish the work. For a vehicle like Mahindra Scorpio, it will cost Rs. 35,000. Sun roofing is mainly done on medium range sedans like Skoda Octavia and will cost from Rs. 35,000 – Rs. 3,50,000. The ones which cost less are the base models which is also called pop-up and the high-end ones offer panoramic view, opens fully and are completely electric,’’ he adds.

INDIAN SCENARIO

Indian auto industry, one of the largest in the world, accounts for 7.1 per cent of the country’s Gross Domestic Product (GDP). India is also a leading auto exporter, with high prospects for growth. In April-March this year, export of passenger vehicles (PV) and commercial vehicles (CV) registered an increase of 16.20 per cent and 4.99 per cent respectively, over the corresponding period last year. With the Government of India and major players in the Indian automobile market launching several initiatives, India is expected to become a global leader in the two-wheeler and four-wheeler markets by 2020.

India’s automobile industry is cruising along a smooth track. Rising disposable incomes in both rural and urban areas and availability of easy finance are the main drivers of high-volume car sales figures. With the Central Government providing incentives and pursuing industry-friendly policies, huge investments are being witnessed in the automotive manufacturing sector.

Such a positive scenario has had its impact on the aftermarket too. According to a report by Indian Brand Equity Foundation (IBEF), the Indian automotive aftermarket is estimated to grow at around 10 to 15 per cent to reach $16.5 billion by 2021 from around $7 billion in 2016. It has the potential to generate up to $300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s GDP.