Case Example

Creating Value in Aftermarket Distribution in India for one of the Largest Tier 1 OES in the World​

Client Challenge

The client is a leading Tier 1 OES (Original Equipment Supplier) active in aftermarket distribution. ​

The client wanted UC to conduct feasibility study of business idea for setting up an independent distribution entity supplying OEM and non-OEM high quality/ accredited products in the market (that includes spares, consumables and accessories) ​

The client wanted to set up a distribution entity supplying auto components to the retailers and service centers in India​

For this purpose, the top management of the company requested UC to conduct a feasibility study which was focused on assessing: ​

Key challenges in the current distribution practices - Competition dynamics​

Key success factors for the proposed distribution entity - Workability of the business concept​

Market size of aftermarket in India specific to key Indian cities​

Our Approach

- Initiated the project with context building so as to understand business concept in detail and the strategic intent of the company​

- Conducted about 150 primary interviews in 13 cities (such as Mumbai, Delhi, Kanpur, and Jaipur, Ludhiana, Jalandhar, Patna, Ahmedabad, Bangalore, Chennai, Kolkata, Kochi and Indore)​

- Interviews were conducted with aftermarket channels partners such as Distributors, Wholesalers, Retailers and Service Centers / Garages. OEM and OES companies located in auto manufacturing hubs such as Pune, Ahmedabad and Chennai were also interviewed ​

- Tested concept workability through intensive discussions with channel partners and key industry leaders ​
- Identified key challenges and key success factors for an auto component distribution entity ​

- Estimated auto component aftermarket demand in India, its regions and key cities ​

- Identified the key market players and analyzed competition ​

Our Impact

- Initial Project Feasibility Report the included:​

- Detail response to concept from channel partners​

- Current aftermarket distribution challenges and key success factors for distribution entity ​

- Market sizing – India, region and city level​

- Competition analysis​

- Economics analysis – revenues, margins, incentives​

- As a next steps, the client wanted UC to develop a detailed market entry strategy to enter aftermarket distribution​