SKF restructuring aftermarket distribution in India

SKF Bearings India Ltd. (a publicly traded, 54%-owned subsidiary of SKF AB, Sweden) will be reorganizing its automotive and industrial replacement bearing distribution network in a long-term initiative which may run through 2007. SKF is the dominant bearing vendor in the Indian marketplace. It controls at least 30% of the country's total market and several specific sectors such as the fast-growing two-wheeler market. 60% of its sales are to vehicle OEMs and 40% to the aftermarket. Only the aftermarket distribution is being reorganized. With approximately 75 industrial and 150 automotive distributors throughout India, SKF plans to increase that total by almost 80% during the course of the program. Geographically, while SKF's market penetration in major population centers is strong, it sees an increasing need to service smaller markets where there is less competition and more opportunity to grow. Managing Directory, Rakesh, Makhija, said, "We are encouraging distributors to open branches at consumption points, mostly in rural areas. Resultantly, distributors may become smaller as we increasingly go in for a rural thrust." New Ad Agency Appointed Separately, SKF India named Everest Integrated Communications (Mumbai) as its advertising agency of record. Everest topped two other agencies in a final "bake off" of presentations. And because SKF has several issues it needs to address in India, the agencies needed to develop programs showing they both understand and can deal with a wide spectrum of issues. Prabhakar Mundkur, Everest's President, said, "SKF is the undisputed market leader when it comes to automotive and industrial bearings, but it has a unique problem -- a problem of rampant duplication. SKF being such a respected name, unscrupulous marketers are passing off spurious bearings to unsuspecting customers under the SKF name. We have been a appointed to put a check on this, which is a bit like fighting piracy." He went on to say, "The objective is two-pronged. While on the one hand we have to educate the trade and the garage owners on the benefits of selling original SKF bearings through contract programs and workshops, on the other, we have to build consumer awareness through mainline media by creating a branding for SKF."