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Old 5th May 2015, 13:34   #1
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Default The local Auto Accessory shop - A declining business

The automotive industry has witnessed sales numbers that no one would have predicted about a decade ago. Nearly 25 lakh new cars are delivered every year in India! With such massive volumes, one would expect accessory shops to be swimming in money like Scrooge McDuck (aka Uncle Scrooge). Unfortunately for them, that's not the case & the reasons are many.

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Think about it. 10 - 20 years ago, the first thing we'd do with a new car was drive straight to the local accessory shop. Floor mats, sunfilm, seat covers, audio systems, number plates, mud flaps, wheel caps, Autocop security + remote, bigger horns, foglamps etc. were on the 'must-have' list. But times have changed...and how!

Threat #1 - Standard features of modern cars

Cars today come loaded with accessories & gizmos, and these feature levels will only increase with new launches. Entry-mid level hatchbacks & sedans offer you many of the features you would get earlier with only a premium luxury car. Case in point: The Mercedes C-Class didn't even get a USB port in 2005. In 2015, the Nano's ICE not only gets USB, but also Bluetooth music streaming .

The Hyundai Elite i20's 'Asta' trim comes with features like a leather wrapped steering wheel, alloy wheels, a smart key, rear parking sensors, a reversing camera, foglamps, 8 speakers, a multimedia audio system and more. Honda has learned its lesson too. The City's 'VX' trim gets 8 speakers, a smart key, a reverse parking camera, foglamps, alloy wheels, leather upholstery, a leather wrapped steering wheel and a sunroof. Opt for the VX(O) grade and you can even get a 6.2" touchscreen audio visual navigation (AVN) system!

Leave aside the top variants, there are many middle variants out there with an acceptable level of features. With manufacturers offering so much to begin with, the need to go to the accessory store doesn't arise. Here’s a quick look at the list of items that people would buy, and how the situation has changed:

• Stereo: Now standard on most cars. Even mid-variants of sedans have a head-unit.
• Speakers: Some cheaper variants don't get a head-unit, but have speakers. A relatively small % of owners would upgrade speakers, most would stick to the OEM stuff.
• Sunfilm: Banned by the Supreme Court. Enough said.
• Remote-locking security system: Available on even entry-level cars today.
• Floor mats: Given free by nearly all dealers.
• Air freshener: Available even at petrol pumps now.

The list can go on. There's hardly a reason to visit the accessory shop now. Even if you do, the transaction amount / number of items is certainly smaller than it once was.

Threat #2 - Online Shopping

Just about everything has gone online now. Clothes, electronics, books, food – anything is just a few clicks away. Websites like Flipkart, Amazon, Ebay, Snapdeal etc. offer car care kits, infotainment systems, lights and literally every accessory you would get at a shop.

The local Auto Accessory shop - A declining business-amazon.jpg

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The options of sub-categorizing the type and brand of accessory, selecting your budget, lower prices and free delivery make shopping online almost instinctive. Additionally, if your local accessory store doesn't have a certain product, e-commerce sites can source it from anywhere in the country and have it at your doorstep in a matter of days. You can even pay an additional amount to have it delivered within 24 hours. In an era where time comes at a premium, the convenience of shopping online is unbeatable.

Threat #3 - Dealer Freebies

We Indians love to drive a hard bargain; dealers oblige by throwing in freebies to sweeten the deal straight off the bat. Whether it’s a festive offer or just something the salesperson agrees to throw in to meet his targets - dealers offer a wide range of merchandise. Cross-shop, pit two dealers against each other and you'll get an additional freebie or two.

The local Auto Accessory shop - A declining business-showroom.jpg

Last edited by Aditya : 7th May 2015 at 09:56.
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Old 5th May 2015, 13:36   #2
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Threat #4 - Manufacturers introducing official merchandise

Car manufacturers aren’t aloof from the potential of the accessory business. Maruti has MGA. It's the same case with Ford, VW, Toyota and just about every manufacturer in the market. Some dealers push these accessories aggressively.

The local Auto Accessory shop - A declining business-mga.jpg

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The main motivator here is the trust factor. People get the sense that these parts have been tailor made specifically for their cars. Apart from that special feeling of authenticity, buyers will be willing to trust a manufacturer when it comes to quality. After all, if you trusted them with your lakhs, why wouldn’t you with your thousands?

Threat #5 - Warranty Concerns

No one wants to risk voiding their warranty. The fine print on manufacturer warranties isn’t always the clearest thing to decipher. Motorists fear that a simple wiring cut due to an ICE install could result in the service centre blaming you for a manufacturer error, or a problem that the warranty would cover otherwise. And if someone really wants an accessory, why not get it from the dealer, thus keeping the warranty intact?

This threat has only gotten stronger with time, due to the ever-increasing durations of warranties. 5 - 7 year extended warranties have made their way to India. Considering how complex cars have become, and exorbitant spare part pricing, few car owners want to risk losing their warranty cover.

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Accessory Store Owners Speak

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- Pritpal Singh, owner of Manmohan car accessories in Shivaji Park, has been in the business for ~40 years now. The best selling products at his store include seat covers and mats. Singh says that the online space has certainly hurt business as people don't see the need to go to a store anymore. Additionally, he highlights that all cars come accessorized directly from the dealer, so the footfall drops automatically.

- Narendra Raju, owner of Samartha car accessories in Santacruz, has been in the business for the past 25 years. Best selling items include sound systems, reversing cameras and seat covers. Raju states that business has dropped in the past 2 years and attributes a share of the decline to the online space, pointing out web players like Flipkart, Amazon etc.

- Darshit Dudhaiya runs Motor Sounds @ Lokhandwala with his partner Atish Krishnan. The company has been in the business for over 7 years and is mainly known for building custom sound systems for cars. They have a workshop in Mulund as well, where they fabricate custom parts. Motor Sounds hasn't faced a significantly negative impact on sales, because for them, customized sound systems are the main business generator. However, manufacturer given accessories have been cited as a factor that drives business away from regular accessory retailers.

- Ravneet Singh Chaddha, owner of Popular car tyres and accessories in Malad, has been in the business for over 12 years. He too states that sales have slowed down recently with the advent of more accessory sources in the market. Collectively, these factors have driven business away.

Last edited by Aditya : 7th May 2015 at 09:58.
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Old 5th May 2015, 15:46   #3
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Default Re: The local Auto Accessory shop - A declining business

Through the nineties, I used to be a regular at the local accessory shop. Have to admit, I haven't given them any business from my last 3 cars. Way back in 2006, I'd sent the Indigo over for the usual stuff (Autocop, Sunfilm, Stereo etc.). But for the 3 cars after that, no real business given. At the most, I'd have bought a freshner or something minor.

Bought a car cover, but did it online. Cheaper, and in less time than it would take me to walk down the stairs. Need floor mats, will be getting it online as well. I usually buy the top-of-the-line variant, so my cars are loaded. The family beater - Nissan Sunny - came in the mid variant; still, it has everything that was needed (security system, ICE, electric mirrors, dealer mats, dealer car cover etc.).
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Old 5th May 2015, 16:21   #4
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Good article. I've been ordering stuff online for a while now due to the following factors:

(1) Wider selection and easier availability of difficult to procure parts: To use an example, the remote cases of my car keys got damaged. ASS would do the repair only if I was willing to change the locks. Lamington road had only one shop which kept it, but they were out of stock. The shop at Dadar Kabutarkhana insisted that I change and reprogram both the keys. Gave a last shot at Amazon and bought two cases from Flipkeys. Watched the video and changed it myself.

(2) I don't have to deal with the take it or leave it attitudes that many shops show.

(3) Lower prices

(4) Time saved if you are not in a hurry to procure the item

PS: Distributors are still cheaper than online if you have to procure things like engine oils (car/motorcycle) and bike chain cleaners/sprays.

Last edited by anilp : 5th May 2015 at 16:25.
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Old 5th May 2015, 17:04   #5
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Default Re: The local Auto Accessory shop - A declining business

Excellent information BHPian. I completely agree with you on the above points. Online business have spoiled even retail outlets of mobile, electronics too. My friend works for a well known Mobile shop chain in chennai. It is very badly affected from the heavy discounted sale of Flipkart, Snapdeal etc. Every retailer is badly affected & they are reinventing their strategies to at least survive. Even though consumers are happy in getting what they want at affordable price but the retail business is on a huge loss.
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Old 5th May 2015, 17:14   #6
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Default Re: The local Auto Accessory shop - A declining business

Yes, definitely the local shops have an impact. Still they can manage I guess. Accessories delivered from dealership are from one of the local shops in those areas. In fact I know some times SEs take new cars to nearby accessory shops. Online sales as well need distributors. Some of the products are directly from manufacturers. But there will be many items which are shipped from a dealer near your area. And yes the modern cars have much equipment already in place. So the accessories needed are less. So my opinion, the bigger dealers in an area will still survive with enough sales. Many of them are having other income too.

Last edited by GTO : 6th May 2015 at 12:40. Reason: Typo
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Old 5th May 2015, 17:34   #7
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Default Re: The local Auto Accessory shop - A declining business

Online for me any day -
  1. Gives me a lot of choices - Brands, variants, colors etc, in one go!
  2. Hints me about the product due to feedback by various users
  3. Helps me save energy to drive to the accessory mecca in my city, park the car in the dirtiest of the parking area and walk around inquiring about what I want, often declined
  4. I can sit for days and days together only browsing and knowing the product more before making a concrete decision
  5. Payment options - Credit Card, Debit Card, COD
  6. Saves me lot of fuel to drive to buy a stuff that costs 500 for which I spent 200 for fuel alone
  7. Buying from a credible online source - Helps me deal with return/exchange in an easy manner (Saves me time and fuel again)
  8. Multiple sites provides me variable rates for same products
  9. There are few accessories that you only get online for older cars (First/second Gen WagonR for instance) - Floor mats, Radio Antennas, Sun Shades), Magnetic Shades for 2nd Gen Honda City ZX
  10. There are many more such products which aren't sold by these shops that one can find online

In fact, here are a few things I have purchased online for my car in the last 18 months alone -
  • 3D Floor Mats
  • 2 DIN Head Unit
  • Component and Co-Axial Speakers
  • Magnetic Sun Shades for Windows
  • Arm Rest
  • Fuse Tap connectors
  • T-Tap connectors
  • Key fob for Flippy Key
  • Battery for Remote locking
  • Dashcamera(s)
  • Tab and Mobile Phone Holders
  • Tab and Mobile Chargers
  • Air Compressor
  • Digital Pressure Gauge & a lot more

Will I visit a shop even if a Product is only marginally cheaper than buying online? - Well no.

Note - I mostly look at the seller rating, feedback and the no of products sold and his experience (no of years) into the business before making a purchase. For instance, when I bought Magnetic Sunshades for my friend's Honda City ZX, the seller shipped 4 pieces of which 2 belonged to the front windows of latest Gen City. I only mailed and they arranged a pick-up and replaced with the actual shades in under 4 days from Delhi.
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Old 5th May 2015, 17:54   #8
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Default Re: The local Auto Accessory shop - A declining business

I've observed this upward trend of cars being very well kitted from the period 2005 onwards.

I still remember the Ads where Maruti used to compare the swift with Merc C-class as it was the cheapest car with ABS, D+P airbags, ACC and integrated music system at it's time.

Also, there is a black market for accessories. I remember when my dad installed a sony HU on the Getz, we were offered the same model for INR 1500 lesser without warranty. (I guess they would ship these from Singapore/Malaysia) Anyway, who buys run-of-the mill audio systems now?

Naturally, everyone other manufacturer started equipping cars better ever since.

Now a (higher) middle variant of the Honda city(SV) will give you a music system, climate control, rear AC vents and electrically adjustable ORVMs. A decade earlier, you would not even get this features on top end variants of C segment sedans and you naturally went to the accessory shop to add them.

Also, dealer push accessories hard as they get high profit margins from them.
When I bought my bike in 2014, I told my Bajaj dealer that I'm getting the same bike at INR 2000 lesser(without accessories) in another showroom. He immediately put in all accessories worth INR 3000(according to him ) and gave me 50% off on accesories. So I ended up paying INR 1500 for the accessories. I'm sure he still makes a decent profit from the accessories.

Last edited by D4D : 5th May 2015 at 17:57.
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Old 5th May 2015, 18:20   #9
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Default Re: The local Auto Accessory shop - A declining business

With cars coming better and better kitted than before, the trips to local accessory shops have definitely decreased. But then I don't think they can be totally done away with. When I wanted to upgrade the sound on my Punto, I went one such shop and got a new set of components, subwoofer and amplifier installed. But apart from that, haven't really felt the need to walk into such a shop.

But the online boom isn't necessarily such a bad thing for the local shops. In fact, the guy I go to in JC Road now generates most of his sales through this websites where he has become a registered seller. And he sure has been getting a good lot of orders online.
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Old 5th May 2015, 18:22   #10
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Default Re: The local Auto Accessory shop - A declining business

We have to factor the growth of Car Cleaning services over the past decade. While the car accessory shops lost business big time, Car Exterior-Interior Treatment shops gained big time.

In Chennai there's a 3M Franchised Detailing (We don't call them cleaning places anymore) shop not more than 30 mins travel from anywhere.

While people stopped paying for accessories, many end up paying for paint protection, under body rust protection (Rip-off IMHO) etc.

If accessory shops need to stay alive, they gotta be thinking of branching out like entering the detailing business.

And need I tell the need for trusted Performance Tuning places? Lot's of untapped potential there.
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Old 5th May 2015, 18:41   #11
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Default Re: The local Auto Accessory shop - A declining business

Nice thread and good insights on the shifting shopping habits of car owners for accessories.

I have also observed that most retail chains like Spar Hypermarket, Hypercity, Total Malls etc have a section for car accessories stocking regular stuff that one would have otherwise gone to local car accessories shop to buy. Examples include car perfumes, body covers, steering covers, car shampoo, polish, dusters, micro fiber cloth, small oil packets etc.

As far as buying online is concerned, for me it's still a niggling fear if the products will be genuine or not & the quality for the price we pay. The choices to buy from online are way too many and reliability a big concern.
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Old 5th May 2015, 19:11   #12
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Default Re: The local Auto Accessory shop - A declining business

Flipkart, Snapdeal & Amazon don't hold inventory - they just link the buyer to the seller. Hence, they cannot be termed as a threat to accessory shops.

https://seller.flipkart.com/?utm_sou..._seller_header

Tech savvy accessory shop owners can actually utilize this medium to sell more stuff.
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Old 5th May 2015, 19:31   #13
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Default Re: The local Auto Accessory shop - A declining business

While I agree with most of the points mentioned above, there are some points to consider which are probably still keeping the accessory shops going.

Consider some of these points

1. The mushrooming of radio taxi operators and the increasing fleets therein - Most of the cars bought for use in these categories are the base models. The "accessorization" is done usually by the driver/ operator post purchase. These people are still going to accessory shops.

2. There are lot of cabs/ fleets in use for the benefit of some of our new age industries like KPO's, BPO's and the like. There is a similar profile of cars in use here as well.

3. With the traffic density in our cities increasing at a faster pace than ever, many people are going to use secondary transport (Radio Cabs, Company operated pooling options, etc). This should help the operators mentioned in points 1. and 2. above to also increase in numbers.

So I feel there is still a market left for these guys. They will also of course need to innovate, change in order to exist in business profitably.
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Old 5th May 2015, 19:51   #14
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Default Re: The local Auto Accessory shop - A declining business

Quote:
Originally Posted by smartcat View Post
Flipkart, Snapdeal & Amazon don't hold inventory - they just link the buyer to the seller. Hence, they cannot be termed as a threat to accessory shops.

https://seller.flipkart.com/?utm_sou..._seller_header

Tech savvy accessory shop owners can actually utilize this medium to sell more stuff.
That's true. But, many old time accessory retailers don;t understand the online business. They are not tech savvy and if they are not then they surely is losing out on the opportunity to younger and newer shops.

For me too, it is online purchasing most of the time. I did go to a few accessory shops for purchasing couple of things like fire extinguisher and floor mats but the experience left a bitter taste.

They do not show you the various varieties, they seem to be a bit laid back, and they always have this take it or leave it kind of attitude.

I think what we lack in India is the concept of specialty malls. There should be a car accessory mall which could host a lot of varieties and brands where people can come and look over and buy stuff at their leisure. Maybe that could give some competition to the online retailers.
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Old 5th May 2015, 19:56   #15
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Default Re: The local Auto Accessory shop - A declining business

Sure one can buy discounted audio systems and alarm systems but they still need to be installed. This is where the accessories shop scores. I had the oppurtunity to buy a usb player for my civic, i researched online and went straight to my accessory shop and got what i wanted. They even installed it for free.It's only the smaller stuff or labor free product market which will be impacted.
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