The German cleaning equipment major is aiming to grow its market share in the B2B automotive segment to 30% by 2027 and also looking at new revenue opportunities with automated car-wash systems.
09 Oct 2024 | 428 Views | By Mayank Dhingra
German cleaning equipment major Kächer, which is the global leader in advanced cleaning equipment for diverse applications, including automotive, is eyeing a bigger share of the automotive market in India.
From being currently pegged at a healthy double-digit share of around 20% in the B2B automotive segment, Kärcher India ...
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German cleaning equipment major Kächer, which is the global leader in advanced cleaning equipment for diverse applications, including automotive, is eyeing a bigger share of the automotive market in India.
From being currently pegged at a healthy double-digit share of around 20% in the B2B automotive segment, Kärcher India aims to register strong growth in the foreseeable future, and capture a 30% market share by 2027. The company anticipates strong double-digit growth in its automotive business in India by the turn of the decade.
Kärcher’s optimism on the Indian market stems from the potential offered by the country’s expansive car parc. Speaking to Autocar Professional on the sidelines of Kärcher’s new, general-cleaning product range launch in New Delhi on October 8, Hartmut Jenner, CEO and Chairman of the Board, Kärcher, said, “When we consider the number of cars on the roads, India offers a huge potential for automotive cleaning equipment, and this will only grow in the future. While cleaning market was always there in India, it is now getting increasingly mechanised.”
“Our business in India has been growing at a 15% CAGR, and we see a huge potential for growth going forward,” Jenner added.
According to Jatinder Kaul, Managing Director, Kärcher India, “Automotive pressure washers have been our core business in India since we started in 2011 and right now, this segment is one of the fastest growing categories, registering a strong double-digit growth. We aim to grow our existing 20% market share to 30% within the next three years.”
Kärcher offers a range of pressure washers and professional vaccum cleaners for the automotive industry with its products being leveraged by OEM-authorised service centres as well as independent workshops in the aftermarket. While the company also retails the more compact version of its washers to end consumers directly through online channels, it distributes its professional range of products through a network of 250 dealers, and aims to grow the channel to 550 by end-2030, in line with its growth ambitions.
“Dealer business has been our backbone in India and of our almost 250 dealers in the country, most of them cater to the automotive segment. While our dealers contribute to only 30% of our entire business today, by 2030, our plan is to increase their contribution by scaling their number to 550 as India is a massive market and we want to have dealers be closer to our customers,” said Prashanth Srirangam, Director, Kärcher Global.
Eyeing new growth opportunities
Kärcher India is also eyeing to tap revenue opportunities from various avenues such as fully-automated car-wash systems as well as car-care products. The company has already supplied 5 fully-automated units to Mercedes-Benz India which has deployed them at its plant in Chakan, near Pune.
“We will also be investing heavily in the area of automated car wash or gantry systems. Right now, we are focusing in the South where such centres are coming up rapidly. The segment has the potential to double every year,” highlighted Kaul.
According to Srirangam, Kärcher India is also in talks with Total Energies for the deployment of such automated systems at the OMC’s fuel pumps in South India. Acknowledging the fact that India is not a true DIY market, Srirangam pointed out that the company is targeting premium car owners looking for a high-quality car wash in minimal time.
Kärcher India is also eyeing the segment of automotive car-care products, including shampoos, polishes and waxes, and as per Srirangam, “We are targeting around 5% of our revenues by 2030 to come from this category of products.”
Investing into local R&D
Kärcher, which has a global presence in over 80 countries, adopts a local-for-local strategy, with the company viewing cleaning as an activity that varies with each geography. “We have to adopt to the cleaning needs of the world, and adapt to their requirements. This is the reason why we are locally present in every market to understand the needs of the customers,” explained Jenner.
While it manufactures some of its products at its local manufacturing facility in Coimbatore, Kärcher India also has a small R&D centre located in the city. “Today, we are leveraging mechanical engineering as well as electronics from our India R&D centre that already comprises 5 percent of our global R&D strength. Going forward, we also aim to leverage India’s software capabilities and expand our R&D activities to IoT and software engineering in the country 4-5 years down the line,” said Marco Cardinale, Chief Technology Officer, Kärcher.
According to Jenner, “In India, we want to invest in the brand, R&D, and towards adding value to our products. While today we are a premium-category player, we want to expand our footprint into more accessible market segments and that requires investments in general.”
Kärcher, which clocked revenues of 3.3 billion Euros in 2023, saw India contribute only 1% to the revenues. The company envisions India to contribute 5-6% of Kärcher's global revenues in the coming years. “While we are not as big in India as we want to be, we have started to be on that journey,” Jenner signed off.