Implications of the Right to Repair Act for Multi-brand Car Services in India.
India’s Ministry of Consumer Affairs (MCA) has introduced the ‘Right to Repair’ initiative to address the challenges individuals face in a market where manufacturers control repair services. This dominance results in high costs, limited competition, and extended waiting times, leading to resource wastage and increased maintenance expenses. The ‘Right to Repair’ initiative aims to enhance the repair experience for consumers by providing warranty and post-sales information, promoting longevity, and offering cost-effective repair options.
The movement has had a profound impact on companies, particularly in the automotive sector. It has compelled some manufacturers to simplify repair processes for customers and independent repair shops, challenging the traditional control manufacturers exerted over repair choices. However, this has also prompted corporations to evaluate their business models, considering potential modifications to product plans and intellectual property rights.
In India, the aftermarket sector of the automotive industry is rapidly expanding, contributing significantly to the economy. Despite constituting only 18% of the components market, it injects approximately $10.1 billion (Rs 83,294 crore) into the Indian economy. This growth presents a promising opportunity for small repair shops, crucial for local economies. As the aftermarket sector expands, local businesses are likely to experience increased demand, leading to job creation and economic growth. Consumers can anticipate lower costs and more efficient vehicle servicing and repairs.
The ‘Right to Repair’ Act offers substantial benefits to multi-brand showrooms and spare parts businesses. It allows these providers to offer annual maintenance contracts for vehicles, including 3-wheelers and 4-wheelers, using quality-approved parts and on-site servicing. This not only reduces turnaround time but also enhances safety by preventing accidents caused by non-approved parts. The act further boosts the production and sales of spare parts for organized multi-brand showroom service providers, positively impacting the entire automotive ecosystem.
The legislative shift in India’s automotive service industry, driven by the ‘Right to Repair’ initiative, is transforming the sector into a more competitive, open, and environmentally conscious space. Beyond its immediate impact on repairs, the initiative underscores a commitment to sustainability, influencing various aspects of the automotive industry and fostering positive changes in consumer experiences and business practices.
Authored By Narasimha Jayakumar,
CEO, Greaves Retail.