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Dec, 03 2014

Brands in top gear

The Indian automobile industry is one of the fastest growing industries and is riding on the success wave. United with growing demand and technological advancements, the automobile industry in India has emerged as a key market in the world.

Indian names have attained shining achievements in the automobile franchise sector too. Read on to know about the top names in the industry.

The automobile industry is one of India's most vibrant industries. The auto sector is one of the biggest job creators. It is estimated that every job created in an auto company leads to three to five indirect ancillary jobs. India's domestic market and its growth potential have been a big attraction for many global automakers. India is presently the world's third largest exporter of two-wheelers after China and Japan. According to a report by Standard Chartered Bank, India is likely to overtake Thailand in global auto-export market share by the year 2020. Another aspect in the automotive industry is the used car sector. Over the last five years, used car industry in India has undergone a drastic change. While owning a used car is no longer a societal taboo, the functional value of the used car has been enhanced by a shorter ownership period (approx. 4 years). 

The Indian automobile industry has a prominent future in India. Apart from meeting the advancing domestic demands, it is penetrating the international market too. Favoured with various benefits such as globally competitive auto-ancillary industry; production of steel at lowest cost; inexpensive and high skill manpower; entrenched testing and R & D centres etc., the industry provides great investment and employment opportunities.

According to the Confederation of Indian Industry, automobile sector currently employs over 80 lakh people. An extension in production in the automobile industry is forecasted, it is likely to rise to Rs 6, 00,000 crore by 2016.

Market size

The cumulative foreign direct investment (FDI) inflows into the Indian automobile industry during the period April 2000 - August 2014 was recorded at US$ 10,119.68 million, as per data by Department of Industrial Policy and Promotion (DIPP).

Fab five trends:

  • Going Green - Rising fuels costs and pollution levels are some of the reasons for this endeavour.
  • Connected cars and infotainment are the future.
  • Cloud and Big Data- Adopting cloud-based solutions will enable Indian auto manufacturers to standardise processes and automate data-heavy transactions.
  • India becomes a key pillar of global automotive market.
  • High Performance Hybrid cars are likely to gain greater popularity among consumers.

CEAT Tyres

CEAT offers franchise opportunities in the field of tyre sales and service under the brand CEAT Shoppe. With proper planning and focus a CEAT Shoppe franchisee breaks even in 18 months and is expected to yield a RoI of 24 per cent YoY. CEAT has been growing on an exponential scale in the last few years. A lot of this growth is attributed to the Non-Truck verticals expansion. CEAT was the first tyre manufacturer in India to introduce a franchise model for Tyre Retail and Service, over the years CEAT franchisees have been at the forefront of delivering a holistic consumer experience to CEAT customers. Franchising has allowed CEAT to develop a service approach towards tyre retail, providing consumers with a smooth, carefree experience.

Franchise facts

Investment: Rs 13-20 Lakh | Area: 500-1200 sq.ft.

RoI: 24% | Breakeven: 18 months

Current presence: 150+

Mahindra First Choice Wheels Ltd

Operational since 1999, Mahindra First Choice Wheels Ltd. (MFCWL) is the country's preferred used car mart and is India's known multi-brand certified used car player. At first, Mahindra First Choice Wheels started with Company Owned and Company Operated (COCO) outlets. This helped the brand to understand different parts of the used car value chain and areas where MFCW can add value to customers and channel partners. However, the COCO approach was limiting the ability to service the rapid growth in demand for the network and with the business model well defined; it transitioned to a franchise approach to expand the network.

Franchisee brings a strong entrepreneurial capability to drive business at the local level. While franchise model introduces systems and processes at the channel network, it helps MFCW in expanding its' network nationally. For last two consecutive years, the brand has been adding 100 outlets annually, which further reinforces its faith in the franchise model of operation. Mahindra First Choice Wheels stands for the cause of the used car buyer. The brand value proposition is to provide used cars that are demonstrably superior as compared to new cars at every price point. The vision of Mahindra First Choice Wheels Limited is to build dominant used-car ecosystem for both its' stakeholder i.e. customers and channel partners, thereby becoming a reference point for all the used car needs.

Franchise Facts: Investment: Rs 40-200 lakh | Area: 2000-20,000 sq ft

RoI: 30-40% | Breakeven: 9-12 months | Existing stores: 400+

Steelbird Helmets

Steelbird is one of the oldest and quality manufacturers of Helmets in India having technical collaboration with BIEFFE- World's Number One in Helmets.  The brand does not manufacture even a single helmet which does not meet ISI specifications. The brand boasts of its USP being Quality and innovations. Steelbird manufactures innovative helmets with different technology like helmets with outlast technology / Helmets with D' Ring , open face helmets with Anti theft system / Helmets with bigger vents like SB -33 / SB -29 to have cooling impact etc.

Steelbird provides product, manpower, software and customer handling training to its franchisees. The brand supports itsfranchisees in infrastructure development,  promo activities, recruitment of staff, revenue generation, material availability through their distributor, exclusive decals to increase margins and to retain exclusivity. Steelbird plans to open company owned and franchisee run shops in tier- II and III towns.

Franchise facts: Expansion plans: 200 shoppes within 2-3 years | Area: 250- 450 sq ft

Investment: Variable | RoI: Variable | Existing stores: 8


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