Car companies to sell spare parts via independent retailers

Car companies are now making spare parts available to independent distributors, a move that comes after the CCI slapped a fine of Rs 2,545 crore on 14 car makers last August for unfair business practices in the spare parts market.

Leading the pack is Ford which has allowed its spare parts to be traded in the open market. Ford India vice-president, customer service N. Prabhu said, “We have approved five independent distributors across five states who will make genuine Ford spare parts available to independent repairers.” The five distributors are in New Delhi, Tamil Nadu, Kerela, Karnataka and Maharashtra while they are scouting for distributors in Gujarat, West Bengal, Andhra Pradesh and North Eastern states.

Ford India was slapped a fine of Rs 39.78 crore by the Competition Commission of India (CCI), while Tata Motors was fined the highest Rs 1,346.46 crore.

In an official note, the CCI had said, “The 14 car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were not provided access to branded spare parts and diagnostic tools which hampered their ability to provide services in the aftermarket for repair and maintenance of cars.”

The car companies usually sell spare parts only through their dealer network, often resulting in high and arbitrary prices. He said that Maruti Suzuki and Hyundai have also started following the same. In line with this, Ford has launched an extensive workshop expansion plan, with tier-II and tier-III cities in focus, and plans to double its workshops to 560 in five years from the current 280.

“More than 50 per cent of the service outlets are in smaller cities and we’ll be expanding aggressively in those regions,” Mr Prabhu said, adding the company has reduced the spare parts cost by an average of nine per cent to 13 per cent depending on the car type and has also reduced the service charges.