Auto component makers eye Rs 2,000-cr market in Northeast

The region is estimated to have a vehicle population of a million, close to 2% of the country's total vehicle population

The domestic auto component makers have set their eyes on the under-served Rs 2,000-crore annual market in the Northeast and will explore opportunities to ship products to neighbouring markets such as Myanmar and Bhutan from the region. Industry claims that most auto parts sold in the Northeast are not genuine.

A first-of-its-kind expo is being held by the Automotive Component Manufacturers Association (Acma) with the government’s Department of Heavy Industries at Guwahati on November 26-27. About 80 component makers, including leading names such as Minda, Lucas TVS and Rane, are gearing up to participate in the aftermarket expo.

“The automobile markets in the North, West and South are getting saturated. In the East, Northeast remains an untapped market. In a study, we found that most of the products being sold there are fake because none of the vehicle or component maker supplies there in the quantity that gets consumed,” said Rattan Kapur, president at Acma. The Northeast is estimated to have a vehicle population of one million, close to two per cent of the country’s total vehicle population. Two-wheelers account for half of these vehicles, while the remaining are cars, trucks and other vehicles.

Owing to poor rail network and connectivity, roadways are the primary mode of transportation for passengers as well as goods in the region. Interestingly, the commercial vehicle density in the Northeast is at 60 per 1,000 people against the national average of 50.

The replacement demand for auto components is higher in the region because of the wear and tear caused due to hilly terrain, poor roads and heavy rainfall in many areas. Accordingly, components such as brake and clutch parts, pistons, valves, oil seas, tyres, shock absorbers, wiper arm and blades are in demand.

The region is estimated to have 155 automobile dealers, 2,000 component retailers, and 1,800 repair workshops and garages, mostly in towns, cities and along the highway. “We will have a direct link with the market there and get the middlemen out. In addition to ensuring genuine parts, customers can also expect better prices,” said Kapur, who heads Mark Exhaust Systems, a joint venture with Maruti.  Acma expects to receive around 1,000 traders and distributors in the expo.

While most of these would come from the Northeast region, at least 50 are expected from neighbouring countries such as Bangladesh, Myanmar, Nepal and Bhutan.

The government plans to build a road network between the Northeast and Myanmar and that will allow the industry to tap newer markets. “We want to be there early. When the road infrastructure there is developed, we want to use it to export to countries such as Myanmar and Bhutan. Guwahati will become a hub for distribution and buyers will not need to come all the way to Kolkata or Delhi,” said Vinnie Mehta, director-general at Acma.