The Indian automobile industry is a dynamic and thriving sector, offering an impressive range of profitable franchise business ideas for aspiring entrepreneurs. With the increasing demand for automobiles and the growing preference for branded and professional services, automobile franchises are gaining significant traction in India.
These ideas in the blog below give you a glimpse into the diverse opportunities available in the Indian automobile sector. With the right approach and strategic planning, entrepreneurs can leverage the growth potential of an automobile franchise in India and achieve success in this dynamic industry.
Table of contents
Car detailing
Car detailing has emerged as the most profitable business venture among all options for a car franchise in India, offering entrepreneurs an opportunity to cater to the growing demand for vehicle care and maintenance. Car detailing involves a comprehensive process of cleaning, restoring and enhancing the appearance of a vehicle and protecting its body paint with products like ceramic coating and paint protection films (PPF).
Car detailing franchises usually require a one-time investment ranging between ₹18 lakhs to ₹20 lakhs for the franchise fee, studio space, set up, equipment, staffing, training and promotion. However, the returns on this investment are high, as car detailing is a high-profitable, high-revenue generating and low-capex business. The need for training is medium, as car detailing franchises provide extensive training and support to their franchisees.
However, in India, it is imperative right now to go with a brand as consumers tend to choose brands over local stores for car detailing services. This is because brands offer better quality, reliability and customer satisfaction. Therefore, car detailing franchises need to have a first-mover advantage to get the brand in high demand and capture a larger market share. CarzSpa Detailing Studios has been able to help close to 100 automobile sector entrepreneurs start their detailing franchises under the CarzSpa brand. With the established reputation and recognition in the car detailing industry, CarzSpa has been able to offer lucrative business opportunities to many aspiring entrepreneurs.
| Automobile detailing | Value |
|---|---|
Initial investment | ₹18 lakhs to ₹20 lakhs |
Space | 1000 to 2000 sq. ft. |
Working capital | ₹3 lakhs to ₹5 lakhs |
Operating expenses | 10% to 20% of total business done |
Training | Provided by the franchisor |
Revenue & Profitability | High, depends on detailing and coating services |
Car wash and care services
One of the best automobile franchise business ideas in India is car wash and care services. Car wash services are in high demand, especially in urban areas with growing car ownership. A car washing franchise in India can be a lucrative option for an entrepreneur who wants to tap into this market. However, before you start a car wash business, you need to consider some important factors such as the capital, space and expenses required.
The capital required depends on the location, size and type of car wash franchise. The estimated initial investment ranges from ₹10 lakhs to ₹25 lakhs for some of the popular car wash franchises in India. This includes the franchise fee, equipment costs and other setup costs. The space required to set up a car wash shop also depends on the franchise model and the services offered. But a general estimate is that you need at least 1000 to 2000 sq. ft. of space to start a car wash business and ensure that the space has adequate water supply, drainage and electricity facilities.
The average operating expenses every month for a car wash business include the cost of goods sold (COGS), salaries, rent, electricity, water, chemicals, maintenance and other miscellaneous expenses. The COGS can be around 7-10% of business done, salaries can be around 30-35% and rent can vary depending on the location and the size of the shop. Other expenses can be around 10-15% of business done. Therefore, the total operating expenses can be around 50-60% of the total business done. However, this is only an approximate figure and it may differ depending on various factors.
| Car wash and care services | Value |
|---|---|
Initial investment | ₹10 lakhs to ₹25 lakhs |
Space | 1000 to 2000 sq. ft. |
Working capital | ₹2 lakhs to ₹5 lakhs |
Operating expenses | 50% to 60% of total business done |
Training | Provided by the franchisor |
Revenue & Profitability | Moderate, depends on customer volume and repeat business |
The revenue potential of a car wash business is moderate, as the ticket value of sales is lower compared to other automobile services. Therefore, a car wash franchise owner must ensure a high customer volume and repeat business to achieve good profitability.
Used car sales
Another one of the best franchise business ideas in the Indian automobile sector is used car sales. Used car sales are booming in India, as more and more people are looking for affordable and reliable vehicles. However, there are some challenges and risks involved in this business that need to be considered.
One of the main challenges of a used car sales franchise is the high requirement of working capital to invest in the stock of cars. As per our experience and understanding, to start any form of car dealership business in India you need a working capital of around ₹60 lakhs. A used car sales franchise owner needs to have sufficient funds to purchase and maintain the cars, pay the salaries, rent and other expenses and deal with the fluctuations in demand and supply.
On the other hand, the revenue potential of a used car sales franchise is high, as used cars have a higher resale value and lower depreciation rate than new cars. The Indian used car market size is one of the largest in the world. In 2022, an estimated 4.4 million used cars were sold in India. The used car market is expected to grow at a CAGR of 17.5% during the 2021-2030 period, reaching $99.71 billion by 2030. The COVID-19 pandemic has increased the demand for personal mobility and preference for used cars over new cars.
| Used car sales | Value |
|---|---|
Initial investment | ₹60 lakhs to ₹1 crore |
Space | 2000 to 5000 sq. ft. |
Working capital | ₹60 lakhs to ₹1 crore |
Operating expenses | 40% to 50% of total business done |
Training | Provided by the franchisor |
Revenue & Profitability | High, depends on resale value and depreciation rate |
Car repair workshops
Car repair workshops are essential for maintaining and servicing cars, especially in India, where road conditions and traffic are challenging. A car repair workshop franchise can be a rewarding option for an entrepreneur who wants to cater to this need. A car repair workshop franchise only requires a little capital or space to start. However, it requires a lot of emphasis on training, as car repair workshops need to have skilled and certified technicians who can handle various types of cars and issues.
Having a meticulously trained team of car care personnel is the core of the success of any car repair business. Car repair workshop franchises in India provide meticulous training to entrepreneurs and business owners who have their own car workshop or are planning to start a new car workshop. The revenue potential of a car repair workshop franchise is high, as car repair workshops can charge for various services and parts. In some cases, entrepreneurs club the businesses of car repair and car wash franchises to increase their earnings.
| Car repair workshops | Value |
|---|---|
Initial investment | ₹15 lakhs to ₹30 lakhs |
Space | 1000 to 3000 sq. ft. |
Working capital | ₹5 lakhs to ₹10 lakhs |
Operating expenses | 30% to 40% of total business done |
Training | Provided by the franchisor |
Revenue & Profitability | High, depends on service and part charges |
A report by Bengaluru-based market research firm RedSeer projects the Indian car services and repairs market to reach a staggering $25 billion by 2030. This projected growth underscores the immense potential of car repair workshop franchises for entrepreneurs seeking to participate in this lucrative market.
EV dealerships
The Electric vehicle (EV) market in India is expected to grow at a Compound Annual Growth Rate (CAGR) of 44% from 2020 to 2027. This makes the EV dealership business among the list of ideal franchise business ideas in the automobile sector. EVs are the future of mobility, as more and more people are switching to clean and green vehicles. The government is promoting EV adoption by offering various incentives, such as subsidies, tax exemptions and charging infrastructure. An EV dealership franchise can be a lucrative option for an entrepreneur who wants to be a part of this revolution as they’d get the first movers advantage and resultantly a larger market share.
However, one of the challenges of an EV dealership franchise is the difficulty in choosing the right brand to partner with. The EV market in India is highly competitive and fragmented, with no clear market leader. One of the earliest electric cars to run in India were the Toyota Prius’ and now there are players like Tata, Kia and Mahindra. Among electric two-wheelers are Hero Electric, Ola Electric and Ather Energy. Each of these brands has its strengths, weaknesses, opportunities and threats in the EV market.
| EV dealership | Value |
|---|---|
Initial investment | ₹20 lakhs to ₹50 lakhs |
Space | 1500 to 2500 sq. ft. |
Working capital | ₹10 lakhs to ₹20 lakhs |
Operating expenses | 20% to 30% of total business done |
Training | Provided by the franchisor |
Revenue & Profitability | High, depends on brand reputation and customer preference |
Therefore, an EV dealership franchise owner needs to do thorough research and analysis of the market trends, customer preferences, brand reputation, product quality, pricing, after-sales service and profitability before deciding which brand to go for.
Which type of franchise is the best?
Upon studying the industry’s evolving trends and customer demands, it comes to the revelation that car detailing franchises stand out as the most promising and rewarding venture. Car detailing offers a compelling combination of high demand, decent investment and substantial returns. With the increasing emphasis on vehicle maintenance and aesthetics, car detailing services are in high demand, among both urban and rural car owners. This demand further translates into attractive profit margins for franchisees.
Some concluding thoughts…
CarzSpa, one of the best car detailing franchises in India, has established itself as a frontrunner in this lucrative market. With a proven business model, comprehensive support system (Club CarzSpa) and brand recognition, CarzSpa empowers franchisees to deliver exceptional paint protection and automobile detailing services and earn great business.
While car wash franchises also present a viable option, their profit margins are generally lower than those of car detailing franchises. Used car sales, car repair workshops and EV dealerships, while offering potential, face challenges such as high competition, regulatory complexities and the need for specialised expertise.
To conclude, car detailing franchises, particularly with CarzSpa, emerge as the ideal investment opportunity in India’s automobile sector to establish a successful and rewarding business venture. You can reach out to the CarzSpa franchise opportunities team at franchise@carzspa.in.
Frequently Asked Questions
1. Which franchise is most profitable?
There is no definitive answer to this question, as different franchises have different costs, revenues and risks. However, some of the factors that can make a franchise more profitable are high demand, mid-level investment, high margins, brand recognition and support. Based on these criteria, car detailing franchises are among the most profitable in the automobile sector.
2. How to start an automobile business?
To start an automobile business, you need to:
- Raise enough capital to fund your business.
- Choose a suitable location for your store.
- Fulfil the legal requirements and obtain government approval.
- Get insurance and ensure safety measures.
- Buy the necessary equipment and tools for your business.
- Hire qualified and skilled staff for your operations.
- Promote your business through effective marketing strategies.
- Open your store and launch your business.
3. Is opening a car detailing business profitable?
Yes, opening a car detailing business is profitable, as it is a niche and growing market in the automobile sector. A car detailing business can cater to the needs and preferences of car owners who want to keep their vehicles in top condition and protect them from wear and tear. A car detailing business can charge for different packages and add-ons and enjoy high customer satisfaction and loyalty.
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