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OEM Update

Auto part makers hit hard by duplicate parts

October 21, 2009 6:50 am

Just when top auto component makers are seeing good OEM business, aftermarket sales, once the most stable revenue stream, has been hit hard by spurious parts. Bosch India is feeling such an impact that the company has created a secret team that tracks such parts with police help. The problem is old, but the last couple of months have seen a spurt in spurious parts. “They are mostly made around Delhi and Ludhiana,” says K. Ravi, Head, automotive aftermarket division of Bosch India.
The company, whose aftermarket sales are around Rs 1,200 crore, has seen 15-20 per cent of its market taken away by spurious parts makers. “This might negate the recent rise in orders from OEMs,” says Vaishali Jajoo, an analyst with Angel Broking who tracks the automotive sector. The new-found urgency to combat spurious parts comes even as the OEM sector recovers quite slowly from its heydays.
The auto-component industry is roughly worth Rs 41,000 crore, which puts the fake market between Rs 15,000 crore and Rs 19,000 crore. The government sees loss of revenue in the form of excise duties, Vat and other local taxes. Currently, the government is incurring a loss of approximately Rs 4,250 crore, according to ICRA Management Consultancy Services.

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