Is the vehicle servicing business in India undergoing a transformation? Looking at recent developments, the first impression is a definite ‘yes’. Steps are being taken for creation of a national chain of organized workshops that is likely to vastly change the vehicle servicing market.
Currently the players in the vehicle servicing market are vehicle dealers and their service centers, authorized service centers of vehicle manufacturers, some organized multi-brand vehicle service centers, and roadside mechanics. India adds a million new cars every year, half-a-million commercial vehicles and eight million two-wheelers to the vehicle population. There is a definite requirement for quality service at reasonable prices.
Identifying a huge opportunity in this segment, Bosch is planning to expand its presence in the automotive independent after-market business. The company is targeting a turnover of Rs. 1,000 crores in the after-market and service equipment business by 2010 against the current Rs. 700 crores.To know more about the company’s business plans I recently met Mr. K. Ravi, Regional Sales Director – India and SAARC (Automotive After-Market), MICO.He said there is huge potential in the after-market and service equipment business in India.
The car business in the country is just picking up volumes, and cars are increasingly becoming computers-on-wheels with 35 per cent of the vehicle dominated by electronics.He feels that the country still doesn’t have sophisticated service equipments and diagnostic tools to cater to the growing requirement. In order to tap this potential, Bosch is expanding the product range in this business by bringing some of its global technology products into India. It is also planning to manufacture some of these products in India.
A core competency centre has been created in the country to manufacture these equipments in the MICO production complex.Indian after-market Mr. Ravi further said that, in the Indian after-market business Bosch registered a 12 per cent growth in 2006. The company has had a good first quarter in 2007 and expects the after-market business to fare very well in the coming years. The reason is that the sales of vehicles, across all segments, have been growing satisfactorily for the past three-four years.
Usually for any new vehicle, the service requirement for the first three years are met by the manufacturers through their network. Vehicle manufacturers are now offering extended warranty. As a result, vehicle owners continue to use the OEM service network even upto five years. It’s only after five years that all these vehicles come to the open market for service and repairs.
In India 50 per cent of Bosch’s current business is accounted for by the diesel segment. The products offered by Bosch in the after-market include auto electricals, batteries, belts, braking systems, clutch plates and cover assemblies, diesel systems, filters, gasoline systems, gear pumps , glow plugs, horns, lighting, lubricant oils, relays, spark plugs, wiper blades.Going forward, Bosch plans to position itself as a one-stop shop for sales and service and to make available the entire range of products to those who come for service.
The service points would not only sell the parts but also service them. The company is providing intensive training to its business partners for service of components in the after-market. It has created a training centre in each and every State and is offering training in nearly 10 languages. Training is also given on soft skills.Mr. Ravi said Bosch has a network of 750 diesel service centers and 60 auto electrical workshops throughout India, plus 150 Bosch car service centers.
There are plans to raise the number of service and customer contact points to around 1,500 to 2,000 from the current 950 in the next three to five years. Global scenarioFurther, at the global level Bosch has given a boost to its workshop equipment business. It recently acquired brands like Beissbarth and Sicam. This will further strengthen Bosch’s diagnostics unit in the workshop equipment business segment, especially when it comes to diagnostic systems.
For Bosch, the main outcome of the acquisition will be an expansion of its chassis-measurement systems product segment. Its workshop equipment range will also now include tyre-servicing equipment. Moreover, the acquisition will serve to strengthen its workshop equipment business at OEMs’ authorized repair centers.
An agreement for acquiring Beissbarth and Sicam was signed on February 14 last. Together, the two companies generate sales of roughly 90 million Euros and employ a total of some 430 associates at two locations, as well as in several sales companies. Beissbarth GmbH manufactures chassis measurement systems and tyre-testing equipment, and also sells tyre-servicing equipment. Sicam s.r.l. focuses on tyre-servicing equipment. JV with MahaBosch has also agreed for joint development of new test equipment and processes with Maha.
The two companies will jointly develop new test equipment and processes. In this, they will be merging Bosch’s know-how in testing technology related to engine segment, such as vehicle diagnostics, and Maha’s expertise in the wheel and chassis-related business, such as chassis dynamometers.With mutual co-operation, Bosch and Maha are responding to the increasing cross-linkage of mechanical and electronic systems in vehicles.
The joint development work is focused on enabling test institutions and workshops to provide efficient and expert testing of modern vehicles.Bosch car service In India a vehicle owner has two options – one is to use the authorized service centers (ASCs) of vehicle manufacturers or roadside mechanics for their repairs. ASCs offered customers standardized service at costs predetermined by vehicle manufacturers that ensured transparent operations. The huge premium charged by vehicle manufactures for their genuine parts and the cost of labor meant that customer had to settle for a higher bill.
On the other hand, the roadside mechanic used spare parts openly available in the after-market that is cheaper compared to genuine spare parts. The problem with roadside mechanics is the lack of transparency in operations as customers are short charged in components used. The structure of the market created a gap in terms of customer’s needs and expectations.
This is were Bosch has positioned itself to fulfill these needs – quality service using genuine and OE quality spare parts at an affordable price. According to Mr. Ravi, India is one of the key growth markets for Bosch. The global partnerships in the area of automotive service equipments will have a huge business opportunity in India.
Currently, the multi-brand car service market is witnessing exponential growth in India. At the same time, the second-hand car market is also expanding fast. A customer buying a second-hand car is looking for a reliable service solution, and this market has touched close to two million cars and the customers want a branded reliable service solution.
Normally the OEM takes care of service for the first three years, and now with extended warranty some manufacturers retain customers even for upto five years. But in India, the life of all these vehicles is anywhere between 10 to 15 years, and from the fifth year till the end of product life it is the independent garages that provides service to the vehicle.
The Bosch Car Service (BCS) is a global phenomenon. Worldwide there are more than 8000 BCS centers. The company brought this concept to India a couple of years back. Today it operates more than 150 of its car service centers throughout the country. The company targets 200 BCS centers by the end of the current financial year. This is a ready market available for the new range of service equipments which Bosch plans to launch in the Indian market. In the service equipment business, Bosch currently offers battery testers, auto electrical test bench, multi-functional tester, diagnostic tester (Bosch KTS and ESI tronic software), engine analyser and MICO FIP test bench.
The company is also planning to launch a low-cost version of the diagnostic equipments to suit independent garages to be sold at an affordable price.Currently the garage equipments business is dominated by many Indian and international players. Madhus, RAI and Elgi represent most of the global brands in India. Snap-On has a direct presence in India and sells the popular JBC and Hoffmann range of products. Manatec, the Indian brand has its strong presence in the domestic market. Bosch Diesel Service CentreMr. Ravi disclosed that Bosch is also planning to expand its Diesel Service Centre and provide end-to-end service solutions for all diesel powered vehicles.
Apart from being an expert in the repair of conventional diesel injection pumps and components, it is well-equipped to repair all Bosch systems and components such as Electronic Diesel Control pumps & Common Rail pumps both on and off the vehicle.There are approximately 500 Bosch Diesel Centers worldwide, including 35 in the Asia-Pacific region alone.
In India, Bosch recently inaugurated its first diesel service center in Gujarat. This center, the first of its kind in India, exhibits highest level of capability with round-the-clock service. Bosch plans to open another five more centres in the coming year, depending on market conditions and future customer needs. He said: “With the state-of-the-art testing and repair equipment imported from our parent company, the BDC, initiated by its channel partners is authorized for all Bosch after-sales service and warranty work on diesel powered vehicles.
The center is well-equipped to service a large number of modern cars and trucks, as also provide regular diagnostics and repair diesel and auto-electrical units.Bosch is well poised to take the big leap forward. It has its service network in place and is continuously expanding its reach. With the automotive after-market set for exponential growth, Bosch is well on its way to scripting another success story.
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