Why India's Two-wheeler Aftersales Market Needs a MakeoverAround 99% of the start-ups in garage aggregator and pick and drop model have already shut down for not addressing the real challenges of the sector

India has the largest number of two-wheelers in the world. Over 33.3% of Indian households own a two-wheeler and the market is thriving with more and more people adopting two-wheelers, primarily due to traffic congestions, growing economy and easy access to loans.

As the number grows, maintenance and up-keep of these vehicles becomes equally important. Why? For hassle-free ownership, increasing shelf life and keeping emissions under control.

While there are new economy channels being developed for sales, both online and offline, aftersales services market has been untouched with little or no investment going into it.

The aftersales market across authorized and unauthorized segment employs 60% of the total manpower deployed in automobile industry and vehicle aftersales services is one of the largest consumer market segment, considering almost every household owns a two-wheeler.

The old economy two-wheeler aftersales market comprises of dealer workshops and local garages with the latter commanding 80% market share. While former lacks good customer experience due to expensive billing, the latter lacks trustworthiness. India prefers the market of local garages, because when you have two unhappy choices, you prefer to choose one that costs less.

The market of local garages is uncontrolled and unregulated; 95% of them are usually roadside stores whereas many are fly-by-night set-ups and are highly unreliable. A highly fragmented market with a deep-rooted practice of using spurious spare parts, where the quality of the service is ascertained only by the number of vehicles lying in the garage (popular demand).

Key Challenges

The growing shared mobility demands tech-savvy service market that can catch up to their pace of growth and adoption and urbanization is forcing local garages to either legalise the business (highly unlikely) or shut shop and shift further away. Also, the evolution of vehicle technology like BS-VI is going to result in outmoding these local garages who have no access to skill upgrades.

Will the old economy market be capable of handling the challenges brought in by shared mobility, urbanization and BS-VI, among others? This poses a serious question mark on the future of a market, 80% of which is commanded by the unorganized providers.

摩托车和自行车的无组织的售后市场的冰原r experienced what Meru did to cab market before Ola and Uber arrived or Croma and Vijay Sales did to electronics market before Flipkart and Amazon came into the scene.

So, while opportunity is fresh and large, the challenges are going to be larger these would be the first attempt at organizing a market so large.

Is there a new economy developing? Yes there is. India has seen the rise of several marketplaces, so why should the automobile aftersales market be left behind?

Start-ups are popping up in several segments, leveraging technology to address the needs of the industry in form of garage aggregators, pick and drop providers and managed service marketplaces. However, these have failed to address the issues such as customer's concern around the quality of services delivered by garages and concerns about billing practises followed by dealerships.

Around 99% of the start-ups in garage aggregator and pick and drop model have already shut down for not addressing the real challenges of the sector.

The future of the massive Indian two-wheeler aftersales market (estimated at $9 billion by 2025) lies in the hands of "managed marketplaces' which can leverage technology to operate within the legal framework of the business, assure as well as validate delivery of quality services and cope-up with the needs of new-age vehicles and customer expectations.

All, however, without significantly increasing the cost to the customer.