Discussing Impacts of Pandemic on Auto Industry with Rishab Jain

Excerpts of Discussion With the CEO of Carorbis, Mr. Rishab Jain

Hello everyone!

Today we are interviewing the CEO of Carorbis, Rishab Jain . Carorbis is a young start-up that strives to offer the largest and the most wholesome collection of high-quality, authentic auto products with a vision of making premium auto parts and accessories accessible to each and everyone in the country.

This brief interview discusses how the crisis of the COVID-19 pandemic has affected and fueled the expansion of the e-commerce industry towards new customer groups and types of products. The discussion also highlights how the policy makers can leverage this potential of digital transformation to support their retail business adaptation.

So, let’s start.

What are the impacts of COVID 19 on the Indian Automobile Industry?

I believe that the pandemic has had a major impact on the automotive industry. The spread of the virus and subsequent lockdown resulted in the OEMs being forced to halt their production. This has greatly affected the production of automotive spare parts in the country.

We can also see a reduction in the demand for passenger vehicles. The pandemic, which was previously only affecting the bigger cities, has now wreaked havoc in even the rural and more remote areas of the country with its second wave. This led to the automobile industry also taking a hit.

Except COVID-19, is there anything which is still a big concern for our automobile industry?

Yes. I think that the growing counterfeit market in the country is a great cause of worry for the automotive aftermarket industry.

The automotive aftermarket is one of the least transparent industries in the country and it has been getting worse lately. The counterfeit market grew by 9.6% in 2018-2019 and all indications point to the fact that this phenomenon is only growing.

Counterfeit parts pose a grave threat to an automobile’s performance, but more importantly, such unreliable auto components jeopardize the safety of the vehicle, consequently endangering lives.

Our country lacks the mandated safety standards for automobile after-market products. Due to this, the import of counterfeit products cannot be checked. Consequently, a lot of these figures go unnoticed. In addition to this, authentic auto parts are also not very easily available, especially for the older models of automobiles, which results in counterfeit sales.

This is bad news for the automotive industry, but I believe this also brings opportunity for startups like ourselves to be vigilant and solve this problem.

In addition, the introduction of EVs and the government’s hasty attempt at expediting the process has also caused a cloud of confusion. Although still unrelated to the aftermarket industry, it will surely have a trickle down effect on the entire market.

Anecdotal evidence from the government’s BS6 rollout and the subsequent decline in the whole automotive industry suggests that not introducing EVs in a more phased manner may lead to another decline.

Once the situation gets normal, what can we expect from the automotives sector or what's their future in general?

Automotive aftermarket is generally one of the most resistant parts of the automotive sector. Just an economic slowdown caused by the pandemic might cause a dip in new vehicle sales.

But in addition to just a slowdown in the sale of new vehicles, there are multiple factors that might have a negative impact on the aftermarket sector. A reduction in VKT (Vehicle kilometers driven), fewer accidents, reduced retail traffic, etc. are some key factors that will have a severe impact on supply and demand.

Roads are empty and free of crowds. Usual traffic hotspots and bottlenecks are now congestion-free and there has been a decline in private and business travel amidst the rise of WFH.

The collision rate of automobiles on the road has also declined. The upside is that reduced accidents translate to fewer deaths. For the aftermarket industry though, revenues will dip sharply.

Talking about the road to recovery, We can expect slower long-term recovery that will occur in stages. Having witnessed our government failing to contain the pandemic and the chaos that ensued, hopes of a strong recovery can be all but forgotten. Physical distancing, minimal private travel and remote working may still persist long after all restrictions are lifted.

How can Carorbis or other startups who are in similar stages capitalise from here?

Covid-19 has made traditional shopping difficult for many and even scary for some. On the other hand, this crisis has accelerated the expansion of e-commerce.

Some shifts driven by Covid-19 likely involve long-term changes in ecommerce. Evidence from the outbreak of SARS in 2002 indicates that the epidemic had been a major catalyst for the digital transformation of retail in China.

Significantly reduced buyer friction in the online shopping world was caused by flexible refund policies, fast delivery times and reliable online retailers. Online revenue growth has seen a big spike as of May 2021. The benefits of online shopping from an online bike and car accessory store have been made quite evident and this trend is likely to stay in the post-quarantine world.

There are majorly three reasons why startups like Carorbis will have long-lasting advantages over retail stores. Firstly, the items that are scarce or out of stock can be pre-ordered online with trusted ecommerce retailers like ourselves. Next, complete life cycles of the orders can be accessed at any time and users have the privilege of dedicated support teams. Lastly, a wide selection, convenience and good savings have made switching to online retail easier.

Coming to how can startups capitalize on this crisis, there are three important steps:

Creating an omni channel strategy will be key in attracting and retaining customers.

With a lack of physical shopping environments, offering users a wide range of items online by building robust supply will make sure users come to you for all their shopping fix.

Being able to offer reliable service while ensuring safety of customers and delivery personnel.

That’s it for today. Hope you enjoyed the discussion and got some interesting insights of the automotive industry. Don’t forget to check this amazing bike accessory and car accessory store , Carorbis for their premium and authentic variety. Have a wonderful day ahead.