Exide Industries is powering up its charge in the automotive battery market.
It is getting into new product categories such as electric bike batteries and low-cost branded batteries in the recycled car battery market.
The storage battery maker is pinning hopes on grabbing market share from the unorganised sector for recycled batteries where it has a 37% market share. The company has a 70% market share in the organised market for automotive batteries.
Paban Kumar Kataky, director, automotive, Exide Industries, told DNA Money, “We are in the process of coming up with low-cost products to compete in the recycled battery market. The USP would be a product of good quality at an affordable price. The car batteries that we have just come up with in the recycled category are priced almost 20% lower depending on the size.”
Exide has started production of these batteries at its plants at Shyamnagar and Haldia in West Bengal. “We’ve started production with 15,000 such batteries and the initial response is good. But it early to assess what market share we would be clinching over the next few months,” Kataky said.
The new low-cost car batteries have been introduced under Exide and Standard Furukawa brands. These products have been sub-branded as Champion and Black Panther, respectively.
The company has been focusing on the replacement market in a major way to counter the unorganised segment and also to make up for the losses on the original equipment front in the earlier quarters of the current fiscal due to a decline in sales in the auto market.
Exide gets almost 65% of its earnings from the automotive segment and 35% from the industrial segment.
An industry observer said, “The replacement market is a huge segment as an average battery life is three to four years and much of the growth of the automotive segment is expected from this segment. Moreover, the margins are better in replacement markets compared to the original equipment segment and a good brand can have better pricing power”.
Sanjaya Satapathy, analyst with Bank of America-Merrill Lynch, in a recent report said, “Exide is targeting to increase its share of the commercial vehicle and tractor battery market from around10-15% now to 25% in three years through the introduction of batteries at lower price points.”
“Increased cost savings from in-house recycling is likely to help Exide introduce such product. These new products and capacity expansion at a total cost of about Rs 600 crore by FY12 are likely to sustain 20%+ sales growth.”
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