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Rediff.com  » Business » Fake auto parts cost govt Rs. 2,200 crore a year

Fake auto parts cost govt Rs. 2,200 crore a year

Last updated on: February 11, 2011 17:31 IST
The Indian automotive aftermarket has touched the Rs. 33,000-crore (Rs. 330 billion) mark, but unchecked fake spare parts are costing the government exchequer Rs. 2,200 crore (Rs. 22 billion) a year, according to industry body ACMA.

Releasing a study on the Indian automotive aftermarket, Automotive Component Manufacturers Association of India said the component industry contributed Rs. 24,800 crore (Rs. 248 billion) to the aftermarket.

The industry body also unveiled a "white paper on legislative improvements to combat counterfeit auto components" delineating the quantum of counterfeiting in the auto components in India.

The paper highlights the increasing concern of the industry towards the growing menace of the counterfeit components, which is estimated at Rs. 8,700 crore (Rs. 87 billion) in 2010.

According to the study, counterfeiting not only leads to a loss of Rs. 2,200 crore (Rs. 22 billion) to the exchequer, it also leads to employment loss of nearly 1.15 million jobs in the country per annum.

"It is essential to re-orient the Motor Vehicles Act as Automotive Components Anti-Counterfeit and Product Safety Law with a comprehensive definition of counterfeit or spurious auto components," said ACMA President Srivats Ram.

As per the study, the aftermarket in India of the on-road vehicles was valued at Rs. 33,000 crore (Rs. 330 billion) with 25 per cent on account of servicing and the remaining majority from components.

ACMA said it has also conducted the first estimation of vehicle parc in India, based on 44 regional transport offices that account for 50 per cent of the total and found that in 2010 on-road vehicular population exceeded 94.7 million.

According to the study, two-wheelers were the top contributors to the total aftermarket at 46 per cent. Three wheelers contributed 3 per cent to the aftermarket, while passenger vehicles and commercial vehicles contributed 26 per cent and 25 per cent, respectively.

Vehicle parc is the total number of vehicles running on the roads.

"Two wheelers constituted 76 per cent (of the total vehicle parc), passenger vehicles 15 per cent and the remaining 9 per cent were contributed by commercial vehicles and three wheelers of all on-road vehicles," said Ram.

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