Spares & accessories segment generates a tenth of Maruti Suzuki's revenue

Maruti Suzuki’s spares and accessories segment is growing at a significantly higher rate than car sales. The country’s largest carmaker’s domestic volumes grew around 11 per cent last year. But its auto parts segment posted a strong growth of 19 per cent. This has become a revenue-spinner for the company, earning ~5,571 crore in FY16. Nearly one-tenth of the company’s revenue of Rs 58,208 crore last year came from spares and accessories.

With increasing focus, the growth rate in this segment has picked up in the past couple of years. In FY14, growth was just 5.3 per cent. It rose to 11.3 per cent in FY15 and further to 19 per cent last year. In effect, the business has grown from Rs 4,210 crore in FY14 to Rs 5,571 crore last year in just two years.

A bulk of the segment revenue, approximately two-thirds, comes from spares, the company said. “We firmly believe that once a vehicle is sold, the association with the buyer has to be long-term. The buyer must get genuine accessories at all times. More and more car owners are becoming aware of the importance of using genuine spares. At our end, we have ensured regular availability at competitive prices,” said R S Kalsi, executive director (marketing & sales) at the company. The company, like others in the industry, has been conducting awareness campaigns to promote the use of genuine spares.

It has rolled out Maruti Genuine Parts (MGP) retail shops and appointed distributors. There are more than 480 MGP retail outlets that supply parts to Maruti workshops as well as local garages. There are over 80 MGP distributors that store parts and accessories. These parts could be brake pads, coolants, bumpers, clutches, etc.

Accessories bring one-fourth of the revenue to the segment. Here, the focus in recent years has been on three types: accessories related to styling (seat covers, etc), convenience (parking sensors) and infotainment (navigation systems). Kalsi says more than 1,800 different accessories are available through the company’s sales network. Accessories sold the maximum include seat covers, mats, stereos, reverse parking assist systems, etc.

“We have focused on the accessories business in the past couple of years. Our market research had indicated there is a gap, as far as availability of quality accessories is concerned. We now start parallel development of accessories, while a car model is under development,” said Kalsi.

The company says one-tenth of car buyers today spend over ~50,000 on accessories. “On an average, most customers spend Rs 10,000-12,000 on accessories today, against Rs 3,000 five years ago. A customer, who purchased our compact SUV Brezza, spent over Rs 2 lakh on accessories,” said Kalsi. States like Delhi and Maharashtra lead in the offtake of accessories.

Dealerships, that are the front-end and key contact-point with buyers, are also a happy lot. Availability of genuine spares and accessories is bringing repeat business for them - and increasing revenues.