Established in 1985, Minda AutoCare is the new identity of what was earlier known as Switch Masters Ltd. The company finalising in auto component distribution and servicing is the after-market arm of the Rs. 2,000-crore Minda Group of Companies.
While individual Minda companies manufacture and supply products to OE manufacturers, MACL consolidates the vast product range and makes it available to the replacement market. The product range covers over 1,800 SKUs in eight product categories, namely, switches, locks, wiring harnesses, horns, lighting products, instruments, electronic security systems and automotive batteries.
Mr. Arun Nagpal said that a fast growing automotive industry notwithstanding, the after-market presented its own challenges. Improved quality and longer life lead to longer replacement cycles. The unorganized sector still has a significant share of the market given the price-sensitive nature of the market. Faster changes of vehicles by consumers given the easy credit availability inhibit growth of the after market.
Within the available market, OEMs themselves have increasingly been aggressive players. It was in this scenario that the company was just four years ago faced with a situation of 3-4 per cent CAGR and a Rs. 54 crore turnover in 2004-05, he added.
The team then initiated the concept of paradigm shift to reingineer itself and set itself an ambitious target of doubling its turnover to touch the Rs. 100-crore landmark in the next 3 years. A host of initiatives followed at a scorching pace. The distribution network was revamped and depots set up in all major States. The sales policy was re-oriented to make it more competitive and customer friendly. An extensive communication program covering employees and channel partners was launched to share the company’s vision and action plan, generate confidence and excitement, and change mindsets in keeping with the new paradigm.
An important decision was taken to bring in some discipline in the after-market. Traditionally, markets like Delhi, and Hyderabad to an extent have been more of trading or feeder markets. Traders usually buy in bulk and take advantage of the huge discounts and lower sales tax in their State. These products are then distributed across the country, particularly in states where the incidence of local tax was high. As a result there was a lot of price variations in the market.
From February 1, 2005, MACL adopted uniform tax paid price across India. This brought a lot of financial discipline in the market.
Another major initiative which was part of the paradigm shift exercise was the introduction of a Tier 3 distribution network in order to provide and sustain grass roots level contact with influencers (garages, mechanics and electricians) and sellers (retailers) of its products. Instead of just pushing sales through its Business Partners (Distributors), the company started interacting with the dealers and even garages and mechanics. It has today, a data base of over 20,000 such outlets all over the country, of which some 11,000 are already an integral part of MACL’s distribution network as Minda Retail Partners or Minda Service Partners. The plan is to further enhance the Tier 3 network to cover more than 20,000 outlets over the next 3 years.
This has helped both its business partners and MACL to grow the business further.
Mr. Arun Nagpal observes: “Surely and steadily, the response came through, and the results followed. On March 26, 2008, the company reached the landmark of Rs. 100 crores is sales, a successful culmination of the paradigm shift exercise. MACL has witnessed a CAGR of 24 per cent during the last 3 years.
The name change from SML to MACL was also effected to strengthen its association with the Minda Brand in what is expected to be a synergistic association with the larger Minda Group. The term AutoCare is also expected to convey a pleasant, positive association to the company’s consumer base, in keeping with the recent addition of consumer, service oriented products like automotive Batteries and Electronic Security Systems, adds Mr. Nagpal.
MACL today employs 280 persons, including 140 service technicians. Its distribution network comprises 18 depots, and over 300 business partners (the company does not use the term ‘Dealers’ in keeping with the true spirit in which it values and treats its association with them) spread across 91 A, B and C class cities throughout the country, covering the 2/3 wheeler and 4-wheeler segments, apart from commercial and off-highway vehicles.
Development of a parallel distribution network largely through vehicle accessory dealers is also in the offing. This will support products such as Electronic Security Systems and Automotive Batteries. Another important product which the company will start selling aggressively in the after market is the CNG/LPG kits. Simultaneously, MACL is also actively exploring the possibilities of spreading its wings outside India to address the vast and growing global replacement market for its range of products.
The company intends to create a culture similar to a typical Fast Moving Consumer Goods (FMCG) business model. With features such as variable pay and performance-linked team incentives, ongoing team building activities, an aggressive career development and job rotation program covering employees at all levels, and a stated philosophy to the effect that “Work Can Be Fun Too”.
MACL is proud to have a highly motivated, closely knit team of people ready to take on aggressive objectives with a never-say-die spirit, and proudly boasts of one of the lowest attrition levels in the industry, at less than 10 per cent per annum.
This approach extends to its business partners as well. The company launched the Minda Achievers Club last year to recognize and reward high performers. Depending on their performance, business partners can qualify for the Silver, Gold, Diamond, Platinum or Directors’ Club levels, each of which carries special benefits and privileges. 35 Gold and above Business Partners, accounting for over 40 per cent of the company’s sales, were recently taken for a specially designed Outbound Training Program where they mingled together amongst themselves and with MACL’s top management team, shared feedback and experiences, and were put through their paces over the four-day duration of the program titled ‘Camp Lakshya’ covering Vision and Strategy sessions, Team Building activities, Games and Fun activities, and even River Rafting and Rifle Shooting.
Every year starting 2007-08, Business Partners will nominate from among themselves, a Regional Committee for regular interactions with the respective field sales teams. The Chairmen of the Regional Committees would in turn constitute a Nat
ional Committee which would be invited for discussions with the MACL / Minda Group management teams and provide inputs of strategy, policy and future planning, in the true spirit of Business Partnership.
“MACL has had an exciting, action packed, and successful journey so far. Having achieved the landmark of 100 crores which was only a dream just 3 years ago, the team is not content to rest on its laurels. It has now set itself its next Objective or Lakshya (a theme which even has its own inspirational video built around it), namely Mission 10 X 10, which should see the company grow its business 10 times in the next 10 years. A tall order no doubt. However, given the passion or the Jazba that infuses the team and its Business Partners, Mission 10X10 can only be expected to become a reality as we go along”, Mr. Nagpal concluded.
