Having started off with our first Bazaar Talk feature in Chennai and moving on to the North, West and East of the country in subsequent editions, we head back South for part six of the feature, covering Hyderabad, the capital of Telangana. With over 1,000 retailers of spare parts for different vehicle segments, Hyderabad is one of the largest aftermarket hubs in the South, followed by the city of Vijayawada in the nearby Andhra Pradesh.
As part of its aggressive aftermarket growth strategy, Federal Mogul has established its strong presence in Hyderabad and the surrounding region, making significant inroads into almost all product categories, backed by workforce and product range expansion. We had an opportunity to interact with three of Federal Mogul’s leading distributors in the region – Mr. U. Pardhasaradhi, Managing Director, Cyber Automobiles Pvt. Ltd., Mr. Rajesh Khurana, Partner, Globe Agencies, and Mr. Devender C. Jobanputra of Commercial Auto Agencies.
Our first stop was at Kukatpally to meet Mr. Pardhasaradhi of Cyber Automobiles Pvt. Ltd., one of the largest aftermarket outfits in south India. The company began operations in 1989 and has grown into one of the most sought-after outlets, tiding through challenging circumstances along its journey. Cyber Auto is associated with a number of reputed brands in the industry and currently does a turnover of Rs. 250 crores annually.
A leader in spares for the two- and three-wheeler segments, including the small commercial vehicle segment which has eaten into the three-wheeler space of late, Cyber Auto has been associated with Federal Mogul for two decades, working strategically to help garner a good market share for the American giant and its product brands. Says Mr. Pardhasaradhi: “We have been associated with Federal Mogul since 1992 through another company and were appointed as their official stockist in 1995. We are a leading player in the two- and three-wheeler segments in our region and started dealing with four-wheeler spares in 2007. We deal with pistons, piston rings, cylinder block kits from Goetze and spark plugs from Champion under the Federal Mogul umbrella.”
Mr. Pardhasaradhi feels Federal Mogul has gone a few notches up in the last few years when it comes to catering to market demands and supporting the distributors. He says: “In the last three years, Federal Mogul has been very aggressive. They have offered very competitive prices and attractive schemes, especially for rebore kits. In the last year and a half, they have made major inroads into the market and have sharpened their focus on the two-wheeler segment.”
Cyber Auto works with over 1,000 retailers in Telangana and Andhra Pradesh and a total of 2,500 retailers, taking into account its branches in Vijayawada, Karnataka and Tamil Nadu. The company is currently working on shifting its main outlet to a new 1 lakh sq. ft. location quite close to its existing one in view of the need for more space for business.
Sharing his views on certain trends in the aftermarket, Mr. Pardhasaradhi adds: “Growth in two-wheeler piston replacement will be a very challenging one because customers are moving fast towards replacing the entire cylinder kit rather than changing just the piston. Federal Mogul has spotted this trend well and has started offering rebore kits. We expect them to get more aggressive on this front as we see this as a growing trend.”
Mr. Pardhasaradhi, who is passionate about working in the increasingly challenging aftermarket space, calls for mechanic and technician training which he feels is not adequate at the moment. “More mechanic training workshops are required because the training currently offered in the industry is not adequate enough. Somebody has to take the initiative in this regard, and it is good to see some brands have already started doing so.”
Giving his concluding remarks on the future of the aftermarket, he states: “The market growth will be fantastic in two-, three- and SCV segments, and there is no need to worry for anyone operating in the two-wheeler segment, especially for the next 10 to 15 years. If we constantly update our product range and have a team which continuously monitors market trends and acts accordingly, we are sure to come out successful in this field.”
Our next stop was Globe Agencies, located in the bustling Siddiamber Bazaar area which houses over 100 wholesale and retail shops selling automotive parts. Established in 1982, Globe Agencies has a special position in history for Federal Mogul which happened to be its first principal partner when it commenced operations. Mr. Rajesh Khurana, who joined his father at Globe Agencies in 1993, reminisces: “We started off with Federal Mogul which was our first agency line and have a very long association with them. We are proud to be one of their oldest distributors in the country and have always maintained an excellent relationship with them.”
Globe’s main focus is on the CV segment which contributes to nearly 60 per cent of its sales, with the tractor and passenger car segments accounting for another 20 per cent and the rest coming from the industrial segment. The company sells a range of Federal Mogul products, namely, Goetze pistons and rings, Ferodo brake linings, Champion sparks plugs, Glyco bearings and Goetze coolants. It will be adding Payen gaskets, which will be launched this month, to its portfolio.
Expressing delight over Federal Mogul’s strategy, Mr. Khurana observes: “Federal Mogul has grown with the market requirements, and that is one of the best things they have done. They have expanded their product range and have also proportionally increased their manpower to support the same, which is clearly showing results in the form of rise in market share in various product lines.”
Globe has branches in Hyderabad and Vijayawada and works with around 500 retailers in the region. Having seen the market for long and understanding that quality service is indispensable for staying in the trade, Globe has placed its prime focus on delivering excellent service to customers. “In the current market scenario, it is most important to be competitive and offer good service to customers because only those who give good service will survive in the market. Service is our main focus area, and we maintain good inventory levels to support our customers. At least 90 per cent of our orders, if not all, are supplied to customers on the very same day. We closely track our stock movement and have computerized all the operations”, he shares.
Looking into the future of both the aftermarket and his company, Mr. Khurana concludes: “The aftermarket for CVs will always remain strong, because most of the repair and servicing happens on the outskirts of cities and highways which cannot be completely covered by OEM authorized service stations. As for our company, we do an annual turnover of Rs. 12-15 crores and, despite challenging market conditions, in the last two years, we have maintained our figures. Our focus will still be on dealing with a fixed number of retailers, but offer the best quality service to them.”
Our third and final interaction of the day was with Mr. Devender of Commercial Auto Agencies. Started in 1978, Commercial Auto Agencies is an expert in the engine segment and has very sound know-how when it comes to things related to pistons, piston valves, etc. The company also deals with other products like chain kits, shock absorbers, oil seals, etc., and has made its name by working closely with mechanics and reborers in the region.
Commercial Auto is one of the newest distributors of Federal Mogul, having joined hands with them in August 2013 to sell pistons, rings and valves from Goetze and Champion spark plugs, catering exclusively to the two-wheeler space. Being an expert in engine parts, it seems to have found a perfect match in Federal Mogul.
Mr. Devender explains: “We are very happy with Federal Mogul because our working styles match so well. Their working style suits their tag of being a global company, while they are also one of the most transparent companies in dealing with the distributor and the market.”
While most voices in the industry would talk about an apparent recovery in the automotive market, Commercial Auto is taking a different stand. The company has achieved its highest-ever monthly turnover in history in April this year, a feat which could well be attributed to its growing association with Federal Mogul. Mr. Devender confirms: “Most people might say the market is not too good at the moment, but last month (April) in fact gave us the highest monthly turnover in our history. Federal Mogul has certainly played a major role in this achievement.”
Commercial Auto has been known for establishing a brand in the minds of customers with its ‘high energy’ approach, if one may call it that way. Mr. Devender, a believer in spirituality, feels “The success of one brand in a particular region depends on the perception of the brand in that particular market, and that depends a lot on the distributor. This is where Commercial Auto always makes a difference because we add a lot of positive energy while selling products. Another important aspect in our trade is identifying hidden market potential and tapping new volumes which Federal Mogul has done very well, especially in our region.”
Working with around 400 active retailers and reborers for the engine segment, Commercial Auto sees a bright future ahead. Mr. Devendra concludes: “The future is brilliant both for the aftermarket and for our company. Our turnover and profits have grown well in the last two years, and we are very proud to be associated with a brand like Federal Mogul and to continue our strong relationship with them.”
Overall, it is more than evident that the Hyderabad market is growing at a good pace, and Federal Mogul, on its part, has done a great job of identifying the market trends and growing in sync with the requirements of the region, as evident in the thumbs up given by its distributors.