Rane Auto Parts Catalog

[Jonathon Burnside]

Theaftermarket business of Rane is about 9% of the total turnover of the Group as of 2023-24. Recently, we crossed a significant milestone of Rs. 600 crores in aftermarket business revenue. Except for companies like Rane NSK Steering Systems Ltd and the light metal casting division of the group, the rest of the five group companies/divisions, namely Rane Madras Ltd, Rane Engine Valve Ltd, Rane Brake Lining Ltd, ZF Rane Automotive India (SGD), and Rane Auto Parts, are present in the aftermarket. Steering components and friction material parts account for nearly 70% of the aftermarket revenue. Some of the companies have been in the market for more than four decades, and the Rane brand has become a household name in most markets across India.

It is indeed a matter of great pride for all of us at Rane that the brand has such popularity and visibility from Kanyakumari in the south to Kashmir in the north. We are very grateful to our customers for showing this support and loyalty to our brand.

There is much talk about the automotive aftermarket in India undergoing a major transformation. Helming the aftermarket arm of one of the largest and most respected auto component brands in the country, what do you consider are the major factors shaping/contributing to this transformation, both positively and challengingly? You can pick the top three factors and elaborate.

However, post-2000, companies started realizing and recognizing the importance of revenue from this business segment. Not only was profitability gaining importance, but it was also a strategic de-risking approach for several auto component companies to have substantial revenue from the aftermarket segment as part of their overall turnover. Hence, we started seeing more genuine component manufacturers focusing on this segment with a moral obligation to make genuine parts available for service to end customers.

In the last decade, one important transformation for component manufacturing companies is that exclusive lines and capacities were being allocated for servicing the aftermarket customers. This was a huge shift from the earlier practice of supplying parts to the market based on the available balance after servicing OEM customers.

In the current decade, there is a big race among established and unorganized component manufacturing companies to get a decent share of this lucrative business. This has led to many competitiveness issues and also the proliferation of non-genuine parts flooding the market, posing a huge threat to some safety-related vehicle parts. While the implementation of GST has reduced several unhealthy practices, it is still a concern that this has not significantly shifted the landscape to more genuine parts availability. The attractiveness of this market has also propelled many component manufacturers to explore growth avenues not only through organic revenue generation opportunities, due to the increasing vehicle population every year but also to focus on inorganic growth revenues. This means companies are ready to work with several MSMEs to develop products specifically for the aftermarket, even if they do not supply to OEMs. The approach also stems from the noble thought process of ensuring that customers have options to choose from genuine competitive brands rather than looking at unorganized and/or spurious parts widely prevalent in the market.

This has helped us strengthen our brand recall with mechanics and retailers, who are the principal consumers of the parts and important decision-makers on which brand to buy and service their customer base.

How good is your connection with mechanics, who play an important role in the aftermarket ecosystem? What initiatives have you undertaken to strengthen your connection with mechanics and boost your brand in the market?

At the beginning of every financial year, we identify focus markets where we want to strengthen our mechanic connection. We conduct joint Rane Group mechanic meets in these markets, where we exhibit our current and new product lines available in our portfolio. This forum helps us maximize our connection with key influencers in those markets and showcase our entire Rane Group strength. We also conduct mega dealer meets in identified hotspot markets, with the same objectives of improving our market connection and exhibiting our diverse product portfolio under one umbrella.

As digitization and digitalization rapidly pick up in the aftermarket, Rane utilizes this mode for brand promotion. We have a common Rane Group Aftermarket App that demonstrates our available products with convenient navigation. We constantly engage our customers through digital media like LinkedIn, Face book, Twitter, etc. We have also digitized our entire mechanic base into our SAP system, which helps our current field force and new entrants understand the mechanics they need to focus on. Additionally, we have created a WhatsApp account for the entire mechanic base to push information on key events, such as new product launches and participation in important exhibitions/shows, to the entire ecosystem of mechanics and retailers.

Yes, the focus of OEMs on the spares market has significantly increased in the past eight to ten years. They see this as an important component of their revenue stream. While the competitiveness of OE spares with established and organized independent aftermarket players has increased, OEMs have been catalysts for providing opportunities to component makers for pursuing this revenue stream.

It is also a fact that the price advantage of OE spares compared to independent aftermarket players has tilted the balance towards OEMs, allowing them to better capitalize on this opportunity over the last few years. However, it is up to organized component manufacturers to focus on their strengths, leverage the aftermarket, and work on controllable aspects rather than get disheartened by issues beyond their control.

How strong is Rane in the aftermarket in overseas markets? What share of your business comes from exports, and which are the major markets/regions? Any new focus areas/regions on your radar for further growth and expansion?

The exports component of the aftermarket for the Rane group is still in a nascent stage. We do only about Rs. 100 crores in aftermarket spares exports, catering to countries and regions like the Middle East, SAARC countries (Sri Lanka, Bangladesh, Nepal), the UK, European Union countries (Germany, Belgium, Spain), and the US. We have started in a small way in countries like Australia, Brazil, China, and some East African customers. Friction products and engine components like valves form the major portion of this aftermarket export business. We will continue to identify opportunities for our various product lines globally, as this provides a huge potential for growth. The major challenge in pursuing this business segment would be investing in tooling for various models, for which demand varies from two-digit numbers to several thousand. We will continue evaluating the important balance between revenue generation and investment while pursuing this business opportunity.

A few years back, our group aftermarket business formed close to 12 to 13% of our overall group sales revenue. Although we continued our aggressive growth in the aftermarket business in the last few years, due to substantial growth in OEM and OE exports business, the aftermarket business now forms only 9% of our overall group sales. The mandate from our chairman to the aftermarket team is to quickly hit the next milestone of M1K (Rs. 1,000 crores revenue) by 2027 and increase aftermarket segment to at least 12 to 13% of the total Rane Group sales revenue.

Auto parts maker Rane (Madras) Ltd (RML) is setting up a greenfield facility for manufacturing steering and suspension components for passenger vehicle applications in Aguascalientes, Mexico. Initially, the company will make an investment of $3 million and will increase it to $6 million over the next 12 to 18 months.

According to the company, it chose Aguascalientes due to its strategic location in the heart of Mexico. One of 5 states comprising the Bajio region in Central Mexico, Aguascalientes is home to large OEMs like Nissan and several top tier-1 automotive suppliers.

The new facility will address the large and growing market for inner and outer ball joints in the North American market. RML currently supplies inner and outer ball joints from its Indian facilities to several global locations including Mexico, China and the Central Europe.

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The Rane Group is an Indian industrial conglomerate, headquartered in Chennai. Beginning as a dealer for automobile, trucks and auto-parts in Madras in the 1920s, Rane has grown to encompass ten different companies as of 2013.

In late 2011 the group entered the defense and aerospace market by purchasing a 26% equity stake in SasMos HET Technologies Pvt Ltd. SasMos manufactures interconnection systems (cable harnesses) for various defence and aerospace purposes.[4] Group chairman L. Ganesh was quoted as saying that he foresaw "significant growth opportunities both in India and as an exporter."[4]

The initial investment of US$5 million, with a final projection of US$31 million, reflects Rane Madras LTD's confidence in the favorable conditions offered by Aguascalientes, highlighting aspects such as safety, efficient logistics and the presence of highly trained personnel.

Governor Tere Jimenez expressed her enthusiasm in this regard, noting that the state seeks to expand its participation in the most competitive markets globally, since it has the capacity to occupy the first place as a development power in Mexico and the world.

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