Spurious auto parts sector grows on shortage of premium car spares

Shortage of spare parts in the open market, mostly for premium cars, is sharply driving up maintenance costs for customers who are forced to visit only company dealerships, according to Mr Adithya Bhat, Managing Director, Protiviti Consulting.

This has created an oligopoly of a few carmakers in the car repair/workshop business, and has led to the mushrooming of a large spurious auto-parts industry.

“The philosophy in India is to replace and not repair. This makes customers seek cheaper alternatives outside dealerships, where duplicate parts are sold for far cheaper rates. This is a safety hazard. Only one out of 10 cars are currently repaired at an authorised centre,” Mr Bhat told Business Line .

While most mass carmakers like Maruti Suzuki, Hyundai and Tata Motors have separate after-market distributors and sell parts through both channels, premium carmakers such as Honda, Volkswagen and Toyota have maintained a tight control by distributing original parts only through dealerships. Luxury carmakers such as BMW, Mercedes-Benz and Audi also do not sell parts in the open market.

“We have specialised distributors under the Maruti Genuine Parts brand. We sell parts in the open market so that customers can choose not to go for spurious parts which harm a car's performance and ultimately our reputation,” said Mr Shashank Srivastava, Chief General Manager, Marketing, Maruti Suzuki.

Entry-level/mass-segment cars are also easier to repair in the open market as parts are less complicated and have lesser electronic components compared with premium vehicles.

A Honda official said the company has chosen not to sell parts outside its dealerships as it wants customers to avoid going to the after-market where they may not find the right tools and training for a repair job.

“It is only a perception that the maintenance cost of a Honda car is expensive. Car servicing requires trained manpower and the right tools, which are only available at our dealers. All our cars are technologically advanced and getting them repaired outside may be risky,” said the Honda official.

While in Europe and North America a do-it-yourself culture supports the sale of parts in the open market, in India relatively cheap labour works against such a concept. This is because people prefer going to a small workshop, rather than fix at home.

At times, though the main part may be available, child parts (smaller parts needed to fix/assemble the main unit) are hard to find. Customers are forced to opt for a complete replacement.

“Changing the complete part is far more expensive. Such strategies help automakers drive up revenues, especially when their sales volumes are low. Also, servicing and repair is a far more profitable business than car sales business. In the US or UK, one can get parts online and use a manual to repair,” said Mr Bhat.

> roudra.b@thehindu.co.in

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