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Auto parts maker Wheels India is setting up regional warehouses to beef up after-market sales.
The warehouses will ensure that products are not in short supply, said Srivats Ram, Managing Director.
“Right now, we cater to orders placed for a month. Having warehouses at four regions of the country will ensure pull on a daily basis.”
The company will lease out space to set up four warehouses, which will come up before December, said Ram.
The TVS group company has created a new after-sales brand Wilgo to improve visibility and confidence among distributors and retailers. The name will be reflected in the product and packaging.
Last year, the after-market business clocked Rs 20 crore. This is barely one per cent of sales. “It has the potential to grow to five per cent of sales in 3-4 years.”
This business will also help improve profitability, said Ram. The company is also looking to move production closer to the customer to optimise logistics and boost profits.
During the second quarter, Wheels India’s net profits dropped 22 per cent to Rs 8.60 crore. Revenues too, dipped marginally to Rs 497 crore, impacted by the slowdown in the medium and heavy commercial vehicle and tractor markets. The company also faced a steep increase in energy costs.
“We do not expect a dramatic turnaround in the third quarter. With the construction and mining sectors crashing globally, exports too, will be impacted,” said Ram.
The company’s share was up 5.81 per cent at Rs 758.95 on the BSE on Monday.
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