30 Years – India’s Strategy Boutique
30 Years – India’s Strategy Boutique

Automotive

Strategic Expansion into Auto Aftermarket Distribution: North and West India Focus

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Client Challenge

The client aims to achieve consistent growth in the aftermarket sector at a CAGR of 25-30%. However, their current distribution setup is limiting their ability to meet this ambitious growth target. To address this challenge, the client is considering establishing an independent distribution entity focused on supplying high-quality and accredited products in the market.

Our Approach

  1. Context Building and Strategic Intent:
    • Initiated the project by understanding the client’s existing capabilities and strategic goals for the new distribution concept.
    • Engaged with top management and senior personnel to gather insights into their current operations, strategic intent for market entry, preferred positioning in the value chain, and value proposition to customers.
  2. Market Research and City Selection:
    • Identified 13 cities based on client inputs for deeper research and analysis.
    • Conducted in-depth secondary research and discussions with stakeholders across the value chain, including distributors, wholesalers, retailers, service centers, and industry experts.
    • Explored responses to the new distribution concept, feasibility assessments, current market challenges, key purchase criteria, credit norms, and customer preferences in the selected cities.
    • Analyzed the existing market dynamics and supply chain structures in the identified cities.

Our Impact

  1. Key Findings and Recommendations:
    • Collated responses from stakeholders regarding the feasibility of the new distribution entity, major market challenges, and identified key success factors across various categories (wholesalers, retailers, service centers, distributors).
    • Recommended the client to enter the aftermarket distribution sector due to its attractive growth prospects and positive market perception.
    • Highlighted the North and West regions of India as the most promising areas to initiate the venture, with a phased expansion plan for broader geographical coverage.