As the automotive industry gets increasingly disruptive and digital, the traditional TVS Group is devising more technology-enabled business models. The latest one, set for launch next month, is an ‘e-mall’ for automotive parts. The INR 1,200-crore (2020-21) TVS Automobile Solutions, a leading player in the Indian aftermarket segment, expects the new move in the digital space to generate INR 500 crores by the end of the current financial year. By then the aftermarket industry player is expected to reach an overall turnover figure of close to INR 2,000 crores.
The automotive parts ‘e-mall’ technology enabled move is on the lines of the business model of e-commerce biggies like Amazon and Flipkart. TVS Automobile Solutions banks on its claimed network of 28,000 garages, 11,000 retailers, and over 100,000 fleet owners all of whom are potential customers, to ramp up the new business. Srinivasa Raghavan, the company’s managing director, claims the new venture will be the largest ‘e-mall’ in India.
“The whole idea is that we should provide three things: The first is complete transparency and visibility of parts and its relationship with the vehicle number/part number/registration number, whichever mechanism the end-user feels comfortable to place an order. The second is very important when he can complete his fulfillment cycle and also place his wish list. The third is not only to know the status of delivery but also to follow his/her account history,” Raghavan told ETAuto.
He added that the company has built a catalogue of over 100,000 parts and 85 brands through partnerships with over 80 suppliers across the country. The new ‘e-mall’ is the latest TVS Automobile Solutions move to future-proof its business through expansion into the online space, as well as consolidate its leadership position in the aftermarket industry. Over the past 5 years or so, the company said it has invested INR100 crore to INR 150 crores in technology to facilitate this evolution.
To be in tune with the disruptive times, TVS Automobile Solutions has invested in three “fundamental core IPs” – digital catalogue of parts, cloud-based AI (Artificial Intelligence) platform for multi-brand diagnostics to get “first time right in the repair”, and predictive algorithms, which the company calls prognostics, for pre-emptive servicing.
TVS Automobile Solutions has invested USD 1 million to establish a Knowledge Centre in Sriperumbudur, near Chennai. It is a NSDC- (National Skill Development Corporation) certified 22,000 square feet training centre with six digital classrooms. The centre works with startups and universities to co-develop technology solutions.
The first key move in the digital space was the formation of Ki Mobility Solutions in November 2020. It’s a full stack online to offline digital platform for retailers and garage owners. “India still is a Do-It-For-Me market, and we thought it’s important to bring all the stakeholders into the ecosystem. And today, we are extending that technology to the ecosystem. All this we provide through a singular cloud. Tech-wise the entire platform is on the cloud with in-built AI, where it can convert itself based upon the customers, and it can integrate into the front-end devices of the customers,” Raghavan said.
Big opportunities
The Indian aftermarket industry, pegged at around USD2 billion (over INR 15,000 crores), is only set to grow hereon, says Ashim Sharma, Partner and Group Head, NRI Consulting and Solutions. Sharma expects the Indian automotive aftermarket industry to become a USD10 billion opportunity by 2030.
Independent aftermarket players like TVS Automobile Solutions and a new crop of companies like Go Mechanic, and PItStop want to tap the opportunity presented by the population of vehicles that move out of the OEM-authorised workshops after the warranty period, which usually is of 3 years. “The largest market now is not the parts from OEMs but it’s an alternative part (sold by independent aftermarket players), because only 30% to 50% of vehicles go back to OEM dealerships,” Raghavan said.
International ambitions
TVS Automobile Solutions plans to take the new automotive parts ‘e-mall’ to overseas markets too. “We will focus on the UK and Europe, and Africa will be the next,” he said. The company is present in Europe through a set of acquisitions made earlier. One of them is uc.com, a private label commercial vehicle parts platform with presence in the UK, Europe and in South Africa. “We will expand that globally,” Raghavan said. The other, scuderia.com, sells parts for Ferraris, Maseratis, Bentleys, Lamborghinis and the likes across the world.
New plan in the works
While the aftermarket opportunity grows in the traditional automotive industry, the business dynamics of the aftermarket industry for electric vehicles (EV) will be quite different. TVS Automobile Solutions is “extremely optimistic” about EVs, and would be coming up with a new business initiative soon. For now, Raghavan said, “only thing I would say is Ki (Mobility Solutions) is becoming a preferred choice for EV startups.”
The platform aims to provide retailers and garage owners with the opportunity to increase their business, access to high-quality parts with better margins, link with a large pool of suppliers, digital technology solutions to provide superior services to their customers, digital learning to upgrade their skill and financial solutions to manage their working capital
A cloud-based digital service platform will provide the manufacturers with a wide service network for sales, service, insurance, roadside assistance, charging stations and parts across 250 towns, the company said.
