Automobiles and back up power supply equipments are some of the large users of wet lead acid batteries. Depending on the type of battery, it has to be replaced almost every 3-4 years. Hence the replacement market for batteries is bigger than the OE market. Apart from the organized, branded battery manufacturers, the industry also has a significantly large un...more

Automobiles and back up power supply equipments are some of the large users of wet lead acid batteries. Depending on the type of battery, it has to be replaced almost every 3-4 years. Hence the replacement market for batteries is bigger than the OE market. Apart from the organized, branded battery manufacturers, the industry also has a significantly large unorganized market. Although the OEMs prefer the branded batteries, the unorganized players are predominant in the after sale market or replacement market. The size of the battery industry is difficult to determine, since the size and type of the battery varies depending on its application, particularly for industrial batteries. Hence the number of units sold may not always be the correct measure. Besides the presence of unorganized players makes it even more difficult to determine the market size. In case of automotive batteries, the number of automobiles sold can be correlated with the number of batteries sold. Industrial batteries meanwhile cannot be measured based on units sold since each battery differs based on its application, i.e. an inverter battery is different from a battery used in a power plant or UPS. It is estimated that only around 10 percent of lead acid storage batteries demand is directly linked to new vehicle production while about 40 percent of storage batteries are used for replacement purpose. The remainder of storage battery consumption is mixed and includes about 25 percent from industrial batteries. So the slowdown in auto sector may not impact the storage battery industry so much. The replacement battery demand is expected not to be affected so poorly and it is really critical as it constitute 40% of total market demand. As economies worsen, motorists are hanging onto their cars for longer and demand for recycled batteries is increasing. Importance of demand for replacement car batteries also increases in the light that batteries will continue to fail irrespective of the economic climate. Typically the unorganized players use the old discharged battery containers and recharge the cells inside them. Although the unorganized players are unable to recharge the battery to its full capacity, it is yet preferred over the branded batteries, since it is priced about 20-25% lower than a branded battery. More than two-wheelers and passenger vehicles, commercial vehicles are bigger users of batteries from unorganized battery makers, as they are cost conscious rather than brand. Since the batteries made by these unorganized players are of inferior quality and they have high probability of failing. The share of the unorganized battery manufacturers is expected to reduce going forward with growing awareness among people over the use of inferior quality batteries, implementation of VAT across states and various initiatives taken up by the organized battery manufacturers.  hide