Amaron batteries to charge the market

By , agencyfaqs! | In | December 14, 2000
Amaron batteries hopes to capture 5-6 per cent of the organised sector of the market in just over a year of existence

Ritujoy Chakraborty
MUMBAI, December 14

Amaron batteries, a brand owned by industrial battery major Amara Raja Batteries Ltd (ARBL), has outlined plans to reach a sales target of 1.5 lakh units by the end of the current fiscal, ending March 2001. In collaboration with Johnson Controls Inc, USA (which holds a 23 per cent stake in ARBL), the company currently manufactures zero-maintenance batteries for cars, multi-utility vehicles (MUVs) and light commercial vehicles (LCVs). The company plans to launch batteries for heavy commercial vehicles (HCVs) by February. Amaron batteries are priced between Rs 1,800 to Rs 3,200.

Amaron had introduced its products at the New Delhi Auto Expo this January, and has so far sold around 60,000 units. Of this, 20,000 were as original equipment (OE) to Ford, General Motors, Mercedes-Benz and Ashok Leyland-Iveco. The remaining 40,000 were sold as replacement batteries. Currently, the company sells 12,000 units per month, with 2,000 as OE and 10,000 as replacement units. With a near-equal distribution among cars, MUVs and LCVs, the gross sales figure is expected to go up with the launch of the HCV batteries.

To reach its sales-target of 1.5 lakh units by end-March 2001, Amaron would have to sell 90,000 units within three-and-a-half months! The company claims that if successful, this would give ARBL a 5-6 per cent market share of the organised sector in car, MUV and LCV batteries within 15 months of launch. But not if the competition can help it

Almost 50 per cent of the market for car, MUV and LCV batteries is held by the grey market. In the remaining half, Exide (and sister concern Standard Furukawa) commands a whopping 85 per cent market share. For the rest 15 per cent of the pie, there's a clamour between players like Prestolite, Volta, AC Delco, Delkor and of course, Amaron. More recently, with the entry of mid-range Panasonic batteries and high-end Varta batteries, the competition just got stiffer. So how does Amaron hope to reach its target?

Jayadev Galla, executive director, ARBL, said, "The thrust area for growth today is the replacement market. We feel our target of 6 per cent market share (in organised sector of cars, MUVs and LCVs) is achievable if we continue to rule the hearts and minds of the young-at-heart consumer. When it comes to buying a battery, we want to project a product with an attitude. That's what our brand communication is all about. As for reaching out to companies for OE, we don't need to, they already know how good we are. Our existing OE list is proof that the best believe in our product."

Big claims, and maybe justified too - reputed automotive magazine Overdrive recently awarded the "Most Significant Automotive Product of the Year" to Amaron batteries. While there are other zero-maintenance batteries, for example, the German Varta (which incidentally is the OE supplier to Mercedes and BMW in Europe), they are at much higher price points, thus making Amaron's offering attractive.

Moreover, it's witty advertising lines seem to have found favour with the consumer, especially the lines "Comes with a useless 36-month warranty" or "Doesn't drink and drive" have gone down well with the younger generation. To go with its brand-image, Amaron outlets across the country have been christened as Pit-Stops. And later this month, Amaron will be launching a host of branded lifestyle products that include caps, wallets, jackets, T-shirts shades and much more.

Traditionally, batteries have been a very 'dry' subject, but Amaron seems to be poised to change all that.

© 2000 agencyfaqs!