Government Calls For Shift From "Use And Dispose" To A Circular Economy

The Right to Repair initiative, led by the Consumer Affairs Ministry, includes automobile and auto components. Encouraging consumers to repair rather than replace also helps the $11.8 automotive aftermarket industry. 

It’s not just a cost-saving approach, but choosing repair over replace also helps the environment, which as we know is facing major challenges. And that’s what the Indian Government also encourages automobile users to adopt. 

Highlighting the Government’s Right to Repair initiative, Pralhad Joshi, Union Minister of Consumer Affairs, Food and Public Distribution, said that the focus is to move from a "use and dispose" economy to a circular economy, in a video message at the inaugural edition of STEER, an aftermarket-focused conference organised by the Automotive Components Manufacturers Association of India (ACMA) today.      

The Right to Repair initiative initially focuses on four sectors – automobiles and automobile equipment, farming equipment, mobile phones and tablets, and consumer durables. Hero, Honda, JSW MG Motor, Hyundai, and Renault are among the companies registered so far

Big Growth Opportunity for the Aftermarket Sector

Shradha Suri Marwah, ACMA President and Chairperson & MD, Subros, says the Indian aftermarket industry is at a “pivotal junction” now, and is a strategic pillar for the Indian automotive ecosystem. There’s a $20 billion market opportunity for Indian auto component manufacturers to tap. 

According to Som Kapoor, Partner, Automotive and Future of Mobility Leader, EY India, the United Arab Emirates (UAE) presents a big opportunity for Indian component manufacturers to expand their international business. The UAE is seen as a gateway for the GCC (Gulf Cooperation Council) countries, and also West and East Africa.

In his presentation at the ACMA conference, Kapoor also highlighted opportunities in markets such as West Africa, where EY’s studies have found that Indian automotive parts are perceived to be of similar quality as those made in Europe or Japan. Also, the 10-11 year average age of cars there presents good opportunities to tap. Indonesia, where 94 percent of households have at least one two-wheeler, is another big opportunity.

Tackling the Counterfeit Menace

The Indian automotive aftermarket, pegged at almost $12 billion, is about 15 percent of the overall turnover of the component industry. It has been facing the counterfeiting menace for a long time, though this has reduced to some extent. Highlighting the criticality of regulating the aftermarket industry to address this longstanding problem, Rama Shankar Pandey, Chairperson, Aftermarket Committee, ACMA says that spurious parts have a role to play in 20-25 percent of automobile crashes in India. 

With some regulatory interventions, the aftermarket will not just become more organised, but will also raise quality levels significantly.