The Indian Auto Industry
The selling of counterfeit goods and products under the name of reputed brands not only brings immense financial loss to the original brands but also poses a great threat to the Indian economy.
A suitable response to this situation lies in a visit to the Mayapuri scrap market in New Delhi. Here alloy wheels for as little as Rs 2000 are easily available!
In this market you can find a huge number of auto parts – from a pin to an engine itself. You can find side mirrors, rear view mirrors, bumpers, alloy wheels, rims, tyres, gear boxes – anything and everything – at very reasonable and negotiable prices.
Welcome to Mayapuri. This is the typical auto grey market for you.
No GST, no VAT, no excise, no customs, and above all, applicability of all written laws of the land ends here. Both the buyer and the trader are genuinely comfortable. Even a seller gets some value for his scrapped car. 100s of workers, skilled craftsmen, loaders and transporters derive their means of livelihood here.
After going through the lanes of Mayapuri a thought gets itched permanently in the visitor’s mind – ‘I will never buy a new so-called branded auto spare’.
Every city in the country is today dotted with such Mayapuris.
Though the auto part is a genuine material but it is made from a used one. In many cases, the item is made new from scrap. This requires a great sense of workmanship. This skill has been continuously passed on through generations through sheer dint of talent, hard work and expert guidance – something which can never be found written in volumes of automobile engineering. Degrees and diplomas stop here.
A genuine process of recycling.
Original Equipment Manufacturers (OEMs) are naturally a worried lot. Their products simply cannot compete with those available at the grey markets. The situation – selling of goods and products while replacing those of reputed brands – was inevitable. As a result, OEMs today talk of ‘immense financial loss’.
On the contrary, the OEMs did not consider that the so-called perceived ‘immense financial gain’ was never theirs. Despite reading volumes on management they did not do what the general public intuitively did at the grey markets. Once a vehicle is scrapped, it becomes a public property.
The OEMs avoid recycling, they do not spare any thought on the scrapped vehicles and their components. Rather, they prefer to build from scratch, and invariably they maintain good-for-nothing overheads before, during and after production. With this in view, who should be held responsible for the increased cost of production?
Alternatives are available to the consumer, the end user in plenty. A simultaneous mushroom growth of grey markets is to be found everywhere. With this in view, who should be held responsible for the sharp dip in the OEMs’ market shares?
Market dynamics, in any sector, are so powerful that they find their own way. It is now not possible to arrest the growth of parallel auto economy. However, there are a few steps which should be considered keeping in view a much wider socio-economic perspective.
The solution. The way forward.
– should be more environment friendly,
– should avoid further capital investment,
– should also resort to ‘refurbishing’ rather than re-build,
– first choice for manpower recruitment should be from the grey market,
– and law makers should give a proper life of operation for the vehicle, and finally
– are welcome to procure any goods from the grey markets for their own productions.
Had there ever been an iota of synchronism between an organised sector and its parallel, this story might never have come to be written.
Maybe, hereinafter, the Auto sector shows the way.