Auto-care sector or like the gearheads like to call it ‘car-spas’ are on the rise in the Indian market. Because The auto-care sector is in the inception stages in India, as a result, is the best sector to invest at the moment. The total estimated value of the Auto-care sector is 2 Billion US Dollars. Furthermore, it is still expected to grow at an unprecedented rate. Because of Multi-brands servicing and care brands coming into the race.
A lot of factors play a role in the continuous fast-paced growth of the Auto care sector in India. In this Blog, I will deconstruct the factors and give you the reason for the growth in the Auto care sector. Also, most importantly, I’ll be giving out the major players and Where you should Invest your Money In and Why. So, stick with me and enjoy!
Automobile Manufacturing Boom
India is expected to be the world leader in the car manufacturing segment by early to mid-2020s. This is a direct result of the government initiatives over the past decades to increase Automobile companies in the Indian market.
Also, the FDI has increased in the last 18 years. Also, adding to the fact India provides cheap labour, incentivize lands and flexible tax system. This attracts the Foreign companies to set up shop here.
As a result, the after servicing and auto care sector is increasing to cater to the ever-growing demand.
Lets crunch some numbers.
In 17-2018, 24.97 million units of vehicles were sold. This made India the 4th largest manufacturer of vehicles and 7th largest manufacturer of commercial vehicles.
Out of all the automobiles sold, two-wheelers dominated the market by 81%. Premium bike segment sold over a million unit. In the luxury car segment, BMW increased its sales by 13% and Mercedes by 12.4%.
This again goes to validate my point, that Auto care brands for luxury cars, premium bikes are in their initial stage and a good time to invest in a ‘car-spa’. Now, Auto care brands are accommodating bikes and entry-level cars as well, as they make up a huge chunk of the automobile sold in India.
Income growth and young population.
Over the years India has cemented itself in the world by growing its economy and GDP. The fruits of these are being passed to the working, middle-class people. With the increase in the income and automobile getting cheaper due to automation, the purchasing power of the middle class has increased.
The fact that middle class has more spending power plays a really important role in the auto care sector. Because People will care for their car and give them regular tuning from Multi-brand Auto care because they’re relatively cheap and trusted.
Sales of electrical bikes crossed 55,000 units. This is a low figure but why is this important? Because this figure will grow over the course as this technology makes its way to India. Electric cars will also make their debut, and when they do they will be needing proper care that can only be provided by the authorized dealer or a Multi-Brand auto care or ‘car spas’.
Why Multi-brand auto care centres are best to invest in?
The research shows that only one-third of the automobile go back to their dealers for aftercare and servicing. Customers usually prefer garages and Multi-Brand auto care centre because they’re moderately priced and provide quality care.
In this 2 billion dollar sector, 60% of the Auto care centres are unorganized. When talking money, organized and multi-brand centres take whooping 46% of the whole revenue.
So the moment is ripe for the taking and to invest in a Multi-brand auto care brand.
Two major players in this segment, which offers franchise and also the brand name is-
2) Ceramic Pro
Autotriz has three different models, namely-
1) Single unit Franchise – Investment ranges from 16 to 18 Lakhs.
2) Exclusive Franchise -18 to 22
3)Master Franchise – Investment ranges from 30 to 35 Lakhs
Autotriz boasts 40% net profit! yeah 40%, ain’t that crazy. They Give free lifetime training for your employees and also free lifetime admin training.
Autotriz being a Malaysian MNC and having their centres over 30+ countries has a strong brand name that people trust. Their supply chain and support are also strong. Marketing is done by them for their franchise outlets, guaranteeing to bring customers to their doorsteps.
The Required space is 1500-1800 sqft.
The premium look and design of the outlets help attract premium cars, but their services include packages that are not limited to only Premium Cars but include all other classes of cars. Beside providing Nano-ceramic coating they provide Traditional services like waxing and washing also.
Autotirz is a combination of modern and traditional “car spa”. So, they capture both, the high-end premium, luxury cars and entry-level cars and bikes as well. Autotriz is the only ‘car spa’ that provides all-inclusive services which capture 80% of the automobile market.
An added advantage to having an Autotriz franchise is that they also provide their services in marine, aviation, building and industrial beside automotive.
2) Ceramic Pro
Ceramic Pro is a Russian MNC providing Nano ceramic coating for only premium and Luxury cars. They have a strong footprint too.
Autotriz and Ceramic Pro are the two big players in this industry.
Investment for their single unit franchise is 25 lakhs.
Minimum space required is 2000 to 2500 Sqft.
Ceramic Pro just like Autotriz specializes in Nano-ceramic coating for luxury, premium cars.
In conclusion, investing in auto-care sector in brands such as Autotriz at the moment where there is no real competition is the right move to make. There is a time in every investment cycle, where the sector is just beginning to pick up, and investing in it at the right moment is the key. At the moment Auto-care sector is in the initial phase where investing can be really fruitful, and Franchise is the best way.