automobile industry May, 04 2012

Adding extra mileage to car care biz

Ever-growing Indian automobile industry has broadened the scope for business opportunities. Car care and servicing is gradually emerging as a profitable biz via franchising. Know more about the alluring opportunity

By Neha Gohil
Feature Writer
Adding extra mileage to car care biz

With the growing economy of India, the living standards of the people have also improved. People nowadays do not compromise on comfort. Hence every household owns at least one car today. Buying a car is not that difficult today with the easy accessibility of loans. However, keeping a car is quite troublesome as it requires proper care and maintenance.

On the growing car market, Venu Donepudi, Founder and MD, CarZ says: “Cars are becoming more technology driven. In 2001 car sales were 1.2 million. This figure has increased to 2.5 million in 2011. Moreover, it is projected to double in the next two- three years further. This shows the need of automotive care. Only a third of the vehicles go back to the dealer after the warranty period, so there is huge opportunity.”

Car maintenance shells out huge amount from one’s pocket in short time because the car service market is highly entrapped with unorganised brands which do not provide quality services. Moreover, these unorganised service brands are most of the times not trustworthy. Therefore, the sector is gradually becoming organised offering reliable services. Speaking on the origin of his brand, Ramesh Kharbanda, Chief Operating Officer, TVS Automobile Solutions, shares: “MyTVS was formed with two core values - relationship and trust with an objective to offer post-warranty car customers a well-focused generic service solution. The brand itself was formed with ‘My’, signifying the closest of any relationship (My Car, My Family, etc.,), and TVS, a word synonymous with trust.”

The car service sector is profitable due to the high demand in the market. Speaking on the market growth Kharbanda says: “This sector is quite promising. There is already a demand-supply gap which exists in this sector. The gap is likely to be widened in future necessitating capacity expansion. The passenger car market is changing rapidly with cars becoming more hi-tech and sophisticated, calling for more skilled manpower than dependence on road-side garages. Households have multiple cars of multiple brands. Growth outside metros is being witnessed in this sector.”

Accelerating factors:

To fulfill the gap in the market and to cater the customer in every nook and corner of the nation various brands have opted for the franchise route bringing a new business opportunity for aspirants. Some of the major growth factors are:

Easy finance: Nowadays, purchasing a car is a painless task due to the easy availability of car loans and it has become a major growth driver for the emergence of the car service sector.

Maintenance: People invest their hard earned money in cars and therefore require quality maintenance as well. This can only be provided by branded service centres.

Dependency: Masses today are totally dependent on car for travelling frequently. Hence, the cars require a regular maintenance drive.

Special equipments: Expensive cars require special equipments which may not be available with local car centres. Comparing the unorganised brands with organised ones Donepudi says: “Though there is a large unorganised market for servicing, the more complicated cars of today cannot be dealt by these small shops. Training, parts and equipment is needed, which we can deliver at a cheaper cost than the authorised service centres. Therefore these outlets have as a unique proposition - multi-brand and a one-stop-shop for many of the auto needs of the customers.”

Racers in the field

Though car service industry is highly unorganised but there are a few organised brands providing top-notch car service and a promising business opportunity. Some of these are:

My TVS: MyTVS was established in 2003 as a business unit of TVS & SonsTo become a franchisee, total area requirement is anywhere between 5,000 and 10,000 sq. ft, and an investment in the range of Rs 50 -75 lakh.

CarZ: CarZ was founded in 2008. It offers a full range of repair services for all makes and models of cars. It provides routine and preventive maintenance, electrical and mechanical repair, accident repair – denting and painting, tires and services, battery and many other facilities.

Carnation: Carnation Auto is a multi-brand car solution and service providing chain. It provides a convenient and transparent experience to car owners for any of their car related needs.

Servicing via franchising

Franchising has added an extra mileage to the sector as many organsied brands offer a lucrative business opportunity to aspiring entrepreneurs. On the franchise model Kharbanda says: “We undertook the franchise route to make TVS Quality Services available to customers across the country in a short time, quick ramp-up of network, higher visibility to the brand, encouraging entrepreneurship in the society, and bring in localized thought process/action. Based on our experience, we have made the franchise program much more powerful and remunerative for the franchisee.”

Franchise requisites:

To acquire the franchise of any car service brand one requires a total area of approximately 5,000 and 10,000 sq. ft, along with an investment in the range of Rs 50 -80 lakh which mainly depends upon brands franchise criteria.

The article majorly clears the fact that the sector is promising due to its perpetual demand and the upsurge growth of car market. It will be inspiring for interested entrepreneurs to sum up with Kharbanda’s statement: “Average age of ownership of car has come down and the demographic profile of Indian consumers is supportive of this change. The car-service market is expected to grow at 15-17 per cent for the next three years. Thus, I think it is a good potential sector for entrepreneurs, and the overall future is promising.”

Related: “We are growing more than 150 % Y-O-Y”- Bhushan Karn

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