The domestic automotive aftermarket, which has grown at a compounded annual growth rate (CAGR) of 14 percent in the last five years, is expected to touch Rs 75,000 crore by 2020, a report said on Monday.
The country's car market also has the potential to grow up to over six millions units annually by 2020, up from 3.7 million in 2016, the report by industry body CII named 'Transformation Shifts in Mobility and Impact on Aftermarket in India' said.
"Total aftermarket has grown at a CAGR of 14 per cent over the last five years. The vibrant automotive sector is driving the growth of the automotive aftermarket in India and is estimated to grow at Rs 75,000 crore by the fiscal year 2020," the CII said in its report.
The states of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala together contribute more than 75 percent of the total aftermarket potential, it added.
Noting that increasing vehicle ownership (new and used vehicles) in semi-urban and rural markets are driving demand for auto components, the report said the number of vehicles are expected to grow 6-7 per cent during the next year.
"This offers substantial opportunity for independent aftermarket service providers both existing and new entrants to grow," it added.
According to the report, India's move towards a unified tax regime and push for 'Make in India' offer opportunity to establish and strengthen the local presence.
In addition, relatively lower manufacturing costs make it possible to make the country an export hub for auto parts similar to the case in news cars, it said.
India is targeting the deployment of five to seven million electric vehicles in the country by 2020 under the National Electric Mobility Mission Plan (NEMMP) 2020.
The NEMMP is targeting 400,000 passenger battery electric cars (BEVs) by 2020, which could lead to a reduction in fuel consumption of up to 120 million barrels of oil, the CII report stated.
CII also expects the new mobility solutions market to grow to around $2 trillion market by 2030.Revenue from the taxi cluster alone is expected to exceed $1 trillion by 2030, the report said.