How to Start a Business in Automobile Industry ?

Do you want to start a business in automobile industry? If so, then find in this
article some profitable automobile business ideas and how to start with them.

Automotive industry is a vast and diversified market globally. Car care business
will continue to grow faster than overall economy. Researchers suggest that
there is a far more growth opportunity in future. Firstly due to increasing
number of vehicles and secondly increasing number of average miles driven by an
individual vehicle owner.

CAR ACCESSORIES: 

A car accessory business comes under the
automotive industry. Starting a car accessories business is always profitable looking at the growth of automotive sector in India. One just need to keep in mind that you keeps the right products at your store. For this you need to do a little bit of research on which vehicles are currently running in India and what accessories can be added on to them.

First step to start any car accessory business is researcher or you can  also take the franchise of a well established accessories brand  which has a good record, good name, well-equipped  and also updated with current market demands.

Secondly, decide which kind of store you want to open, is it a physical store or online.

Well having an online store is cheaper as it reduces the overall cost but here your profits will be considerably low.

Third is selecting a niche. There are many competitors in such business.

Few of most promising car accessories
manufacturers are:

• Auto Craft
• Bombay Motor Accessories
• Carspark
• Elegant Auto Retail
• Elite industries

So in order to stand out of the
crowd your business should be differentiated. There can be numerous car
accessories like

• Car Covers
• Car Scraper
• Booster Cable.
• Cleaning Equipment.
• Car Mats.
• Windshield
• Sun Shades.
• Seat Covers.
• Mobile Holder.
• Puncture repair kit.
• Tire inflator and pressure gauge.
• GPS navigators.
• Comprehensive tool kit.

And the most approachable way would be not go for all but to target one particular segment like say either luxury car accessories, seat covers,etc.as it is much easier to establish yourself as a go-to place for a particular type of accessories than for accessories in general.

Fourth , check out your competition and then select the location. If you think the location you selected has a high competition then shift to other location.

And lastly is if you are still left with sufficient funds then advertise wisely as it may increase your sales .advertise in places where you expect your customers to be: car magazines and websites,  social media platform or paid media.

Amount of Funds required : Now in reality some care accessories are really very expensive.

So decide on which particular accessories are truly required in your place .

As a result price ranges from 10000-2L

Number of employees required: on an
average you require nearly 3-5 skilled key staff members to run a small scale
business, when it comes to running a small car accessories store or spare
parts.

IMPORT/EXPORT: In India the basic custom duty on
import of goods depends on HSN codes of the goods. The HSN codes of car
accessories are 87089900, 85177090, and 94019000. Basic customs duty on import of goods in india is 10% .

Licenses required: Apply for a business license to operate a car
accessories business in your area. Contact the county clerk or small business
administration office for information about licensing applications and fees.
Apply for an Employer Identification Number through the Internal Revenue
Service. Use the EIN on tax and other business forms. Purchase business
insurance from a licensed insurance provider. Business insurance helps protect
your products from theft or damage. Insurance can also protect business assets
in the event of a lawsuit or settlement.

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CAR WASH:

Car wash industry has always been a profitable business for decades and has become more competitive as technology is advanced and the number of car owners is growing. If you succeed in your company, there is a profit margin of 50-55 per cent.

It has now become a thorough company from car wash, as it now includes washing, cleaning, painting, repair, and much more. Therefore, it is much more than washing a car and this also includes the staff, the location of the business, the requirement for licenses, the limit for water supply, the
technology used and the business taxes involved.

Target Audience :
Eearlier car washing was preferable among upper class people . But now
situation is different ,now almost upper –middle class people not only own cars
but adopt all means to maintain it . So ur target audience can be

• Office goers
• College students
• Status holders
• Taxi-auto drivers

Second select the type of car wash business you want to start, Ex: A door-door facility or a car wash centre.

In a door to door car wash facility you provide your services by going to the customer’s house and providing the full services there only. Here there  are no heavy start-up costs and therefore, you don’t need any hefty amount of investment compared to the car wash centre .

While in a car wash centre location is an important factor to earn huge profits in a short time span. Cost involved is very high compared to door –door facility.

Location :
Location plays an important role in earning profits . You need to set up your centre at a place where there is requirement by customers and there is less or no competition around.

It can be near a residential area, near office area . So before starting the business have a research on the target area, traffic , type of
business, type of vehicles and anything that can boost up your sales.

Analyze your competitors:

Analyze the rivals and see how many consumers view them on a regular basis and their marketing tactics. To draw customers and improve your
sales follow a product differentiation or cost differentiation strategy.

License :

You need to apply for  the listed licenses so that you don’t face
any problem afterwards:

• GST REGISTRATION: To get your
  business registered with the legal aspects of the business.
• LAND PERMIT : You need to apply
  for land permit specially if you open your business centre in a residential
  area.
• WATER PERMIT: you are required to
  have a water permit too as you need a lot of water to wash the car. There  is a maximum limit to use under this permit. For example: 800litres of water per day is the maximum limit under this permit

Staff :

You are required to have good staff skilled in dealing with customers
and speak to them politely.at the initial stage you can prefer to have at least
two employees and you may increase the number as your business grows.

Funding :

To build a high –quality car wash centre and to provide best services to
your customers you require funds to invest in your business .

A door-door facility requires less investment but when it comes to the centre you require huge
investment as you require well equipped machineries, trained  staffs, rental charges. Machines can itself
cost up to 17-25 Lac.  you should also have a convincing
resume with business or car wash experience to approach banks for loans.

Software:
if you have sufficient funds then you can also go with an automated self
service machines for payment processes .

Market your business:
as you are starting a new business and customers are unaware of your
centre so need to advertise through pamphlets , hoardings, social media
platforms, or even by word-of-mouth.

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AUTO REPAIRS:

Every individual wants his car to run smoothly therefore they always search for good maintenance and servicing auto garage.  therefore, it is one of the profitable business idea.

Every business you start with requires a plan without which it cannot be successful .

Service and staff :

You need to be clear with your service , like how many customers you are going to serve per day and what are the services you are going to provide to your customers and accordingly decide number of staffs required.

Initially you may require 5-6 staffs skilled in handling machines/tools used in the auto
garage and as the business grows you can increase accordingly.

Skills needed to be a mechanic:  If you are good at the automobile repairing then it is
easy to handle the customers, you need to be good with the machine
handling and finding out the problem in automobiles but if you are not able
to repair automobile you need to take the certificate course for automobile
repairing.

You can also hire the staffs who are expert in the auto
repairing skills, ensure that the staff is using the proper safety gears
and following the safety rules while repairing the automobile

Selecting a niche :

At the initial stage it would be better if you focus on one- two segments rather than including many. You can focus on restoring cars, providing an eco-friendly service and go with the current trend of eco-friendly vehicles and start auto-repair garage with
e-cars.

There is no such garage yet for the e-cars so you can start your own e-cars repair garage
business, but before starting your e-garage business you need to take the training for repairing such e-automobiles.

License:  while staring an auto repair garage you need some documentation and licenses which varies from state –state. Motor vehicle department of your state can provide you with an application to apply for a license.

• REGISTRATION OF THE FIRM : you may
  start a medium or small sized auto repair garage either in proprietorship or partnership firm. If you are starting as one person only then register as
  proprietorship, For Partnership operation, you have to register as a limited liability partnership (LLP) or Pvt. Ltd. Company with Registrar of Companies (ROC).
• GST REGISTRATION :  apply for a GST registration to get a GST number which is mandatory to run a business.
• TRADE LICENCE : obtain a trade
  license from local authority.
• Pollution Certificate: auto garage business may create the pollution; therefore, you need to get the pollution certificate from the pollution control department of your state.
• Trademark : In order to secure
  your brand name
• MSME/SSI Registration: If you are wishing to get the government subsidies and schemes regarding your business you need to apply for the MSME registration.

Location :

Must be in a potential area. Minimum area required for an auto repair business is 1500 sq ft. Look for a location in a highway or main road. Having an auto repair garage in highway or main road will be much profitable because the auto repair garage is easily accessible by customers, and it will reduce the towing cost. While selecting a particular area make sure it has water facility, electricity facility, drainage facility and enough space to park the car.

You can also build waiting rooms for customers.

Funding :
Investment will be high as you need to keep a lot of tools in the auto garage . Selecting the right equipment for auto repair garage business is a very important task, therefore while buying the equipment and tools for
auto repair garage business make sure that you are only buying the equipment
that needs to repair automobile don’t buy additional equipment at the primary stage. List of few tools used are :

• Mechanic Tool
• Diagnostic Machine
• Lifting Machine
• Air Compressor

Other expenses required are wages& salaries ,rent, rates and taxes, insurance, advertising, electricity.

Marketing: The most important task is
marketing and promotional strategy which will help you to promote your auto
repair garage.

• Print cache promoting materials
  and distribute in your local areas.
• Attend automobile events where you
  can promote your business in such platforms and also helps in gaining client’s network.
• Promoting through local media like
  newspaper, radio
• Apart from traditional methods you
  can also adopt digital marketing using social media sites.

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TIRE SHOP BUSINESS:

The global tire market is broadly classified into six categories
depending on the type of vehicles. They are

• Passenger car tire
• Light commercial vehicle tire
• Medium and heavy commercial vehicle tire
• Two-wheeler tire
• Three-wheeler tire
• Off the Road tire.

As per automobile experts, the global tire market is forecasting a growth at a CAGR of 8.4% in value terms during 2016-21. This implies that demand for tires is to grow in the coming years.

The first step is doing a market research to
understand the demand for the local market.

Location:

Generally, tire stores are seen doing good in cities and small towns
and highways.

Ensure there are less competition in your area. Pick a position on the busy highway
that has a wide front opening for easy access to visibility. The place nearby petrol pump or gas station may also be considered. You'll also need enough space for storage and installation of equipment inside. To build the floor plan ask an interior expert. Pick the location for storage, installation of the
equipment, office, waiting lounge for the customer etc. Since tyre store is highly inventory-oriented business, it is advisable to start the business with a software that is suitable.

Selecting a type of tire shop:

There are many ways of starting a
tire shop. You can take an authorized dealership of a reputed tire brand like Goodyear®, Uniroyal®, Dunlop®, Firestone®, Goodrich® and Michelin®. and start as an exclusive outlet. Many tire shop owners prefer selling tire of different brands and create a multi-brand store. You can
also go for buying a franchise of a reputed multi-brand tire selling company. Affiliate with multiple manufacturers to give customers an array of product choice.

Choose the product :

Choosing a product largely depends on the type of vehicles that run in your vicinity. you can sell a wide array of types of tires for heavy-duty vehicles, light passenger vehicles, two-wheeler tire, four-wheeler tire, etc.
depending on the amount of funds. The ratio of inventory will depend on the quality of vehicles on the road in the nearby locality. You can also sell rims, tubes in addition to tires in your tire store.

License :

Talk to the local appropriate authority and get the required licenses and permits to start and run a tire shop. In addition, form a company with the most suited business structure available in the state or the country.

As a start-up, you'll need to determine your tire store's ownership pattern first. By formatting LLP, Pvt. Ltd or Ltd Company in
India you can start as a One Person Company or you can go with partners. You
will need to have a Trade License from the local authority after enterprise formation. Get GST registration at the earliest opportunity. You can also start the tire store business by having any renowned tire manufacturing brand Authorized Distributorship. Choose a memorable name for your tire store business which is easy to spell. Also, when selecting a name check the
availability of the domain. Protect brand name by obtaining registration of a
trademark.

Inventory and Equipment :

If you plan to sell tires or a single brand, or purchase a franchise, it will be much easier to select and procure inventory. But if you're starting your own tire shop from scratch, you
have to spend a lot of time developing a network of tire suppliers. You must contact the manufacturer and supplier of different brands and create a standing order procedure for purchasing tire inventories .

You'll need some other basic equipment, too. These are a system for balancing, centring tools, tyre shift, tyre pressure and pattern control, wrenches for impact, etc. Gather the goods from a trusted vendor. Verify that equipment's
warranty period.

Manpower Required :

Hire trained, experienced manpower. Ensure that they have minimum work experience, at least. Keeping an Automotive Engineer is advisable. An automotive engineer is the most appropriate person to deal with the requirements of the customer and give them
the right advice. Assess the number of staff you need, and create a job profile for each requirement. You can hire a recruitment agency, or advertise your local newspaper vacancies.

Software:

If you want to run your business professionally, your tire store must be equipped with the relevant software. Tools such as customer relationship software (CRM), point of sale software (POS), and software for proper accounting is a must.

Funding:

While the initial investment to get a dealership is about 10 Lakhs, 23 Lakhs will be
the maximum investment that is more so in terms of cost to equipment and machinery. MRF recommends a 370 square meter built area which translates to 4000 square feet of total space.

Marketing:

To run a profitable tyre shop a carefully crafted advertising plan is extremely
critical.

Below are a few steps which you can consider:

• Publish some print media advertisement about your grand opening of tyre store.
• Offer a pick-up and delivery service to your customers.
• You can offer some special discount for
  purchasing tyres with accessories.
• Offer some services like wheel balancing free on purchasing tyre.
• Keep stock a wide selection. Customers will be more likely to buy tyres from your tyre store if you have a large selection and offer the sizes and brands they are looking for.
• Offer promotional gifts to your valued customers like t-shirts etc. It will keep your customer happy and it is also effective as a brand building tool.
• Make online presence by creating a website of your tyre store business.
• Register your products on popular eCommerce portal to sell the tyre online.

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CAR SERVICE CENTER:

One may start car service station business in
the urban or semi-urban town with a stock of spare parts as well. We have recently learned that India is expected to become the 3rd largest car producer by 2020 and is projected to hit 7 million vehicles by 2020. Increasing vehicle sales has created an opportunity in the automotive sector to start a profitable car service station business The most interesting part of this business is that
you won't need to have a retail place in a high-traffic destination with a higher price. One can set this type of home-based business establishment or in an area not too far from the central one.

Here are various kinds of services that include
automobile service station business.

• Car wash
• Mechanical jobs like the engine, gear, accelerator, shock-absorber etc.
• Electrical jobs like horn, light etc
• Car air conditioner service
• Wheel balancing and alignment
• Several oil change services like engine oil, gear oil, steering oil etc
• Car body repair service like painting and denting
• Battery service
• Car body polish service

Research and plan :

Do extensive market research before starting your service station in your locality where you want to establish a service station for the automobile. Do a detailed survey on service stations seeking to figure out the potential gap. Which service does it lack?
You can centre your business on that particular service.

Create a detailed business plan for your business in auto service stations. What are the services you'll be offering to your clients? What equipment will be needed? What sort of manpower should he have? How much area is necessary for setup? Calculate the start-up budget with the cost of manpower and some spare parts storage, oils etc.

Funding :

It depends on the city you will be setting up
at. If it is A grade city, a full-option service station costs around Rs 15,00,000/-. But in the case of B grade cities Rs 10,00,000/- is sufficient to establish a service station.

Currently we have 2 types of cars on road ,
Pertol engines / Deisel engines.Battery cars are not much we have. Typically consumers look for lower cost , better service and value-added services. Consumers would look for service centres / good mechanical shop / garage only after free service. Every car has to be serviced in every 3000 kms. Generally a full service for pertol car will cost approximate 4 K, for diesel cars 5 K to 7 K
minimum. Your profit will be 20% to 30%.

Equipment :

You will need to have the equipment and machinery as per the requirement scan. For car wash, a hydraulic lift with a pneumatic washing gun is needed. You will need updated technology equipment for each particular service to offer your customers the best service.

To get record keeping software. This tailor-made software will help you track your
clients correctly. You should also remind them of the time when their vehicles
will be serviced next.

Go for some storage of those regularly needed spare parts. From there you can generate extra leeway.

You can also store some can car accessories such as seat coverings, perfumes etc. By
placing this, you can decorate one of the corners and you'll also get extra
revenue from it.

Manpower :

To start the automobile service station business two different types of manpower are required. Keep the mechanical jobs technically sound, skilled manpower. Check their experience and certificates as per requirement. Holding an automotive engineer is always advisable to overview the entire operations.

Hire some office workers such as work card planning, payroll, cash payment etc. You
can also have an executive of customer care who can interact with the post-service customer about their workshop experience. Since this is a service industry and customer satisfaction is just criteria, it will give you
tremendous added value in your automotive service station business

Software :

Many software developers are available on the market for cheap rates. Get your own software, mitigate the list of spares, and set a market price.

Rate : Set the competitive rate for the facilities your car service  shop is providing. Neither must the prices be too high for consumers to find the service costly and to refuse to come to your store. Nor must your business go into the loss too low.

Name the centre :  Although this is not a
difficult task, the company name must be attractive and should describe the business. A dumb company name can fail to attract customers to the store. One should be creative, and select the unique and easily identifiable name. The name will differentiate your company from any successful enterprise.

Marketing:

Your business publicity is a must. To advertise your business use pamphlets, newspapers. Whenever possible, the flyer must state your business, name, address and contact number. One might ask the local distributor to put the brochures in the daily newspaper. You can place a small ad in the
newspaper's classified section. Ask your friends and family to let others know
about your shop and its services. Try to offer attractive offers to attract the clients. To make your business popular you'll need to be creative. A proper appraisal helps the businessman know that from which type of advertisement profit is generated. Do a survey to find out that most clients come to your shop from which area.

Registration and license :

Register your shop / garage / auto repair business after all has been set up at the proper place. Obtain the license, and allow the auto repair shop to start.

Insurance :

For any business, protection is the must. A good business is the one who made all the arrangements necessary to tackle any type of mishap. So try to get the right insurance for yourself which would completely protect you and your business.

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