It may come as a surprise to some that it's not only safety and security features that are driving the growth in car accessory market. Entertainment and infotainment (head units, speakers, amplifiers, sub-woofers etc) are the biggest revenue grossers for players in the segment, followed by safety and security (tyre pressure monitor, reverse parking sensor).
The passenger car market in India is growing at nearly 10-12%, whereas the orgainsed car accessories market is growing much faster at 15-20%. As organised players have recently started looking at the domestic market, 60% of the car accessories market is controlled by unorganised players, with a significant portion going to the grey market.
According to a Delhi-based car accessory dealer, many accessories are imported without validation, thus adding to the grey market. The market is largely dominated by mom and pop stores. But of late organised players like Reliance Retail and Mahindra & Mahindra are also entering it, points out Preetmohan Singh, Director, KPMG.
Gizmos like navigation, video-on-demand, mobile satellite radio, DVD players, MP3 players are driving the growth in the car accessories market. Global positioning system, popularly known as GPS, is finding initial installations in call center cabs. Nokia has solutions like hands-free kits, car phones, mobile holders and phone chargers.
We conducted a study and found that most people dont have the energy to change CDs and cassettes, so they prefer listening to FM. An MP3 will allow them to listen to the song of their choice, which they cant do otherwise, says Jerry Daniel, VP and COO, Xenos, an accessories maker, which launched an MP3 player.