BATTERIES

Introduction
The Indian battery industry, comprising automobile, sealed maintenance free (SMF), tubular and lead
acid batteries, has been growing at an annual rate of 25 per cent for the last 4 years. The growth is
mainly in the automobile division but, significantly, also in the industrial sectors powered by usage in
telecom, railways, power and other industrial applications. Currently the value of market is over Rs
100 billion and automotive market makes up for 65% of the total. Growth in lead acid batteries is
expected to continue in the future, since heavy growth is expected in the telecom sector and the
governments focus on infrastructure development. In addition, with demand coming from
manufacturing facilities, banking, insurance and finance companies, followed by IT/ITeS sector and to
hedge against power failures, the demand for batteries are only going to surge heaviliy.
Automotive Battery Segment
A phenomenal change was brought by liberalization for the automobile industry. A number of
international players footed themselves in Indian markets. Their demand for world-class batteries
for pushed Indian battery manufacturers to tie up with international players or buy technology, so as
to upgrade their offerings to meet the high standards expected.
With consolidation and growth being the maxim of most auto players today, we are seeing increased
participation and partnership of battery manufacturers with auto players in creating battery
solutions for new vehicle introductions.
The automotive segment contributes in excess of 55 percent of the total turnover of the Indian lead
acid battery market. Demand for auto batteries can be further divided into the OE (original
equipment) market and the aftermarket segments.
This is a difficult division to service as each player has different specifications for which the battery
has to undertake major modification. Additionally, margins for battery manufacturers are usually
thin in this segment due to the bargaining power of the auto majors. However, inherent advantages
such as a steady source of production and revenue, and strong brand recall during battery
replacement make this an attractive segment for battery manufacturers.
The past couple of years have been bumpy in the automotive sector. While there has been a drop in
HCV and LCV (Heavy and Light commercial vehicles) segment sales, there has been an increase in
sales in the passenger car and two-wheeler segments. This has helped soften the blow.
The replacement market has a sizeable small player component - as this was traditionally in the
realm of the small scale sector. These players have hence been able to offer new/reconditioned
unbranded or lesser known branded batteries at very attractive rates. The replacement market is
where the margins are, and hence battery majors are now paying a lot of attention to this segment.
With the introduction of sealed long-life batteries by these players in the OE and replacement
market segments, there could be a drop in battery sales in the replacement market for relatively
new vehicles. However, this market is still substantial, considering that the discerning Indian vehicle
owner is today more quality and brand conscious and hence willing to pay more to be free from
battery problems.
The market leader in this automotive battery segment is Exide Industries Limited. The other players
include Tudor India and Amco Batteries. Amara Raja batteries, a relatively new player in the auto
battery segment, has made very impressive inroads into the market.
Industrial Battery Segment
The industrial market is a steadier, growing market comparatively. Batteries here are used as a
rugged high-drain stationary standby power source. These can be used for moving power and
stationary applications. Moving power application batteries are used in trains, forklifts, submarines,
etc. The demand is substantially higher and major applications are UPS systems, telecommunication
networks, power plants, etc.
The demand for industrial batteries is only bound to increase as India continues to develop the
service sector that includes call centers, data centers, banking networks and other communication
systems.
The industrial battery market has a few established players as capital investment in technology and
the manufacture of these batteries is considerably high, compared to investment in the automotive
battery industry. The per-unit realization is also substantially higher than that of automotive
batteries, but the frequency of purchase is less. This also acts as a barrier for players in the
unorganized sector to enter this market. Amara Raja Batteries is a strong player in the industrial
battery segment.
Drivers & Challenges can be summarised as below:
Drivers Challenges
Growing Automotive Industry Polluting and toxic nature of lead
Increasing demand of power backup Threat from other types of batteries
Booming renewable energy sector Volatility in lead prices
Recycling efficiency Large unorganized segment
Lucrative Replacement Market

Marketing
The interest level shown by any car owner to a battery revolves around only when the car fails to
start. Amaron therefore realized the need to make the consumer think about automotive batteries,
because thinking before a purchase will definitely lead to a comparison among the brands available.
Amaron thus went ahead with its media campaign that created a storm in the advertising industry
and made people look to this relatively new player in the battery industry. Its campaigns are majorly
focussed towards educating the consumer. ) For the first time a battery manufacturer had created
an ad campaign which was in the same league as mega ad spenders like Coca Cola, Times of India,
and others and won the Creative Advertiser of the Year, which was a shot in the arm for the entire
automotive battery industry.
This was followed by Exide when they were a major sponsor in the country for a major cricket
tournament.

DISTRIBUTION
Off late a lot of focus has been given to visibility and network creation. Aggressive efforts have been
made to reach out to nook and corner of the country and points where batteries are consumed and
sold. Strategic tie ups with major automobile manufactures and franchise holders helped in creating
access to there outlets.
Flashy names of outlets like "Pitstops" and "Terminals" helped in building better brand recall and
awareness among the end users.
All these strategies have helped consumers to make intelligent comparisons which has led to the
erosion in the market share of the unorganized sector and cheaper imports. This move towards
branding a low interest product, will go a long way in setting some standards for the industry,
increasing the entry barriers and making quality products available at affordable prices.

INDUSTRY LEADER - EXIDE INDUSTRY- FEATURES
Naming of the brand is derived from the words Oxidation and Excellent Oxide ---> Exide.
Products under Exide brand are Conventional Lead Acid Battery, VRLA battery, Nickel Cadmium
Battery, Tubular & Tele tubular Battery and High End Submarine Batteries.
Strategic Brand Positioning
Positioning multiple brands across the entire price spectrum with established brand equity.
'EXIDE', the brand name embodies the values of excellence, commitment, dependability and
service, which has shaped its character and leadership with a continuing responsibility.
Pricing strategy has resulted in a high recall brand proposition.
As a Market Leader since inception, has redefining the market periodically.
Joined hands with UNICEF to support them in their Child Environment Projects.
Road to Success
Battery Technology from Ex Parent Company CESCO.
Enjoying a monopoly in Indian market up to 80s.
In several African Countries good batteries, irrespective of brand are known as Exide!
Technical collaboration with Shin Kobe group for new technology in Automotive Batteries.
Technical collaboration with Furukawa group for new technology in Industrial Batteries.
Strategies adopted
Entering in the Non-Conventional energy sources, where it integrate and design solar and
wind power solution.
Manufacturing the widest range of storage batteries in the world from 2.5 Ah to 20400 Ah
capacity.
Offers a battery for every type of vehicle on Indian roads.
Exide - Invatubular batteries for Inverter, Tele tubular for Telecom sector.
Tied up with Tata to supply batteries for TATA - Nano.
Acquisition of two lead smelter company.
Introduction of Batmobile, Exidereachout - emergency service for automotive
consumers for battery problems.
Project Kissan and Highway - free advice to farmers about servicing and maintenance.

INDUSTRY LEADER AMARA RAJA BATTERIES FEATURES
Competitive Advantages for ARBL: Advanced technology and the wide distribution network are the
two major competitive advantages that have helped ARBL tackle competition and make in-roads in
an industry that was solely dominated by Exide. Further, now that the company has established itself
as a well-known brand, it itself acts as a sustainable moat and creates a vicious circle for the
company to outgrow competition.
Amara has followed really innovative branding strategies. The company associated itself with a
rugged sport and roped in racer Karthikeyan for endorsing. The company promotes go-karting as a
leisure sport and supports go-kart competitions. Its distribution outlets are called Pit Stops, a racing
term. They all have a standardised design, which franchisees have to strictly conform to. The Pit Stop
reflect the brand's racing theme and its colours. Today, the brand has 100 franchisees across the
country and about 7,250 retailers. It targets retailers of almost every kind ranging from plain old
battery dealers, or dealers in lubricants, auto spare parts, service stations, accessories shops, etc.
There also are other things that they did at the product stage itself to be different. They had put in
fancy wends and charge indicator on the battery. Next was the brand name itself and the colours. Ad
agency O&M and research agency TNS Mode researched a brand name and came up with Amaron
an amalgam of the Hindi word, Amar, (immortal) and `on' in English. The font that was adopted was
green and bold which enhanced the rugged image of the brand.

LOOKING AHEAD
Due to increased domestic competition, strong investment will be required in product R&D, brand
building, competitive pricing, and a very effective distribution network. This will eventually require
companies to focus on exports and tackle neighbouring growth markets even if players have to
manage in lower returns. Ultimately international tie-ups and acquisitions will have to be
capitalised.
By investing in R&D, these players would be able to offer niche products that propel them ahead of
the low-price fiercely competitive segment. On the industrial front, battery manufacturers would
have to constantly upgrade their offerings for the telecommunication and IT industry, taking into
consideration the requirement to expand power storage and discharge capacities, while reducing
storage space occupied at installations and charge time.
On the automotive front, domestic demand from the automotive sector is bound to rise. Batteries
of Panasonic, Japan and Varta, Germany are being imported and marketed in India. Existing
battery majors would have to work closely with automobile manufacturers to retain their market
shares in the OE segment, considering increased competition in this segment.
Innovative attempts in the domestic battery replacement market to de-commoditize batteries
would earn them rich dividends. Supplies to niches such as the electric vehicle segment could also
offer interesting opportunities.
Given their track record so far, it seems certain that the major players in the Indian lead acid
battery market will continue to power their way ahead by tapping the tremendous potential of this
market.

BIBLIOGRAPHY
1. The Indian Lead Acid Battery Market - a Look at Whats in Store Frost and Sullivan Report
2. Amara Raja Batteries Stock Recommendation report by Katalyst Wealth
3. Indian battery market review ElecronicsB2B.com report