PRICING WAR AHEAD IN BATTERY SPACE
In FY12, industry-leader Exide lost significant market share (~1,000bps) in the auto-replacement segment due to capacity constraints. This gave Amara Raja and other players the chance to improve their market share in this category. With capacity constraints now resolved, Exide is out to regain lost market share – it is being pro-active on pricing and is trying to win back dealer confidence.
On pricing, Exide was the first to cut prices in the replacement segment, which it did in March 2012, forcing competition to follow suit. Exide has also adopted the two-tier distribution strategy favoured by Amara Raja. In a two-tier distribution strategy, a company also sells products to end consumers through multi-brand retail outlets. This helps dealers as their risk is spread over multiple brands. This method is expected to help it retain dealers who faced a tough time when Exide had capacity constraints last year.
In FY12, industry-leader Exide lost significant market share (~1,000bps) in the auto-replacement segment due to capacity constraints. This gave Amara Raja and other players the chance to improve their market share in this category. With capacity constraints now resolved, Exide is out to regain lost market share – it is being pro-active on pricing and is trying to win back dealer confidence.
On pricing, Exide was the first to cut prices in the replacement segment, which it did in March 2012, forcing competition to follow suit. Exide has also adopted the two-tier distribution strategy favoured by Amara Raja. In a two-tier distribution strategy, a company also sells products to end consumers through multi-brand retail outlets. This helps dealers as their risk is spread over multiple brands. This method is expected to help it retain dealers who faced a tough time when Exide had capacity constraints last year.
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