The 4th edition of Commercial
Vehicle Forum (CVF) which will be held in Chennai on November 24, 2016 will see
industry leaders discussing several critical issues relating to the commercial
vehicles like the aftermarket. This prestigious forum is being supported by the
Automotive Research Association of India (ARAI). Motown India is one of the
media partners to the forum.
The Commercial Vehicle Forum
2016 is being organised by Threefold which has over 30+ years of management
experience in the events sector and has successfully delivered events in Asia.
Topics that are likely to be
discussed at the forum will include that on the CV aftermarket. Aftermarket is
an important piece of the Commercial Vehicle industry puzzle and the Indian
OEMs have not yet been able to exploit the aftermarket potential as much as
their global peers. Aftermarket revenues as a percent of sales are typically 7
– 10 percent for Indian commercial-vehicle OEMs, as opposed to 20 – 25 percent
in North America and 26 – 34 percent in Europe.
In India it is one of the most
complex functions/lines to manage due to the three stakeholders involved;
Original Equipment Manufacturer (OEMs), Original Equipment Suppliers (OES) and
For distribution of
replacement parts, OEMs rely on their own distribution networks through
franchisees or company owned networks. However, OES have the advantage of
following both routes and margins are higher in doing it independently. In
certain cases, traditionally, OEMs have restrictive covenants for OES which
limits the land of play for the OES. Tug of war exists as OEM restricts OES to
bite into the pie of high margin business (independent).
Customers who spend real money
are not as sophisticated as those in the developed markets. Immediate cost of
replacement is one of the key variables that determine his choice for OEM
distribution network or independent channel. Independent channels are cheaper
but at the cost of spurious parts, inconsistent quality, untrained mechanics.
With advent and penetration of
internet, future is expected to change at a much faster rate. As more fleet
vehicles are equipped with advanced electronics for vehicle diagnostics to
enhance operating efficiencies, there could be opportunities for the
aftermarket to keep these systems serviced and in ideal shape.
“Operators will no longer wait
for one or two days to get a truck back on the road; that’s why the ‘parts
business’ is increasingly becoming a ‘now’ business,”. Parts availability and
responsive delivery will be the key to the future.
Buyer’s inclination will be
towards value and choice; basis will be price-value expectations. What does
existing value chain structure mean for OEM and how going forward, changes may
push them to forward integrate will be the key question.
(Source: Commercial Vehicle Forum 2016)
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