How to open a new service center for automobiles

You can start the automobile service showrooms in two ways.
1. You can start a service center on your own. you can start as a private center without any specific brand like Maruthi.

2. Some automobile companies will give the franchise if they feel you have sufficient land and facilities. If you get the franchise you have to service the particular company vehicles only.

You can select any one of the two options. First, you have to register your service centre as an SSI and get the registration certificate and then you have to have your TIN and GST numbers.

You have to have a spacious place to park the cars and you should have all the facilities for servicing the vehicle. You have to maintain the required inventory so that your showroom will attract maximum customers. Then only you will have good returns. In my opinion, you should invest 10 to 20 million rupees as the initial investment.

If you want to open a service center like Maruti or other automobile company brand , you will have to apply for franchise of the brand of your choice.

Usually, all automobile companies call for tender from time to time. First of all, check automobile companies website for tender if it is available there and you need to register on automobile brand website. If any tender is there to bid, you can apply and complete the other formalities. You will also have to attach a Demand draft of requisite earnest money in favour of automobile company. This earnest money will get refunded to unsuccessful candidates. Dealership form may also be available on some automobile companies website you can download form from there.

For franchise business there are some requirements:
1. Land Requirement: To open a brand franchise showroom /service station, minimum 4000 square meters of land area is required.
2. Cost: The cost of opening a brand franchise service station depends upon land area, location etc. and it may vary from 10 to 50 lakhs.
3. Experience: If you are having any experience in this industry it will be beneficial to you.
4. List of documents required: These documents are to be attached along with the application form.
a. Demand Draft
b. Location map of the proposed dealer showrooms or service stations
c. Photograph of proposed land and proposed dealer showroom/service centre.
d. City map showing major land marks and also showing the other dealer showrooms or service stations
e. Organization structure
f. Applicant's family history
g. Income Tax return
h. Last three years' balance sheets
i. Experience details
j. Applicant's photograph

For franchise business you can check website www.franchiseindia.com. Here you can find many companies offering franchise of their brand. You can also check cost involved and other requirement there. The bigger brand you choose will require more money to invest. A grade city may require more amount while B grade city require less amount.

You will have to register your service center to get registration certificate and GST & TIN as mentioned in above post.

If you will select big brand and invest more it will be difficult for you initially but when your business will progress you will earn more.

If you have interest in opening a service centre for the automobiles then there are some basic requisites which are to be considered. As it is a business service venture you have to get it registered. The company to be registered can be of any type like One Person Company (OPC) or Limited Liability Partnership (LLP) or Private Limited Company (PLC) or Public Limited Company (PLC) and it is evident that in your case you can register under the One Person Company category as you are the sole proprietor of it. Now a days company registration can be done online in the portal of Ministry of Corporate Affairs. Before this you have to choose a name for your company and get it approved by the Registrar of Companies (ROC) so that same name is not being used for the different companies. Now a days you can register the company in MCA portal and there you have to submit certain documents like -

1. Original copy of formal letter issued by ROC regarding availability of Company name.
2. Director Identification Number (DIN) of all those directors of a proposed company (In your case you are the sole one).
3. DSC - Digital Signature Certificate.
4. Form-1 for incorporation of a company.
5. Form-18 for situation or address of the proposed company.
6. Form-32 for particulars of proposed directors, managers and secretary.

This is the formal and administrative part. Now let us come to the practical side. You have to consider them one by one as follows -

1. Source of Capital - You will require a source of capital for hiring a place for workshop and then converting it into a service station by installing certain equipments. In the beginning you will require at least 1 or 2 automobile mechanic and 2-3 helping hands. So working capital for their salaries would be required. Provisions would be required for electricity and water consumption in the service centre. Consumables required for the service would also be required to be made. You have to see whether you have such capital with you or you are thinking to take loan from the bank for this.

2. Survey for work volume - You have to do a survey in the area where you want to open a service centre. If already many service centres are there then you have to reconsider this project. No business can succeed until good work volume that is sufficient customers are there for these services. You may have to find out where the people are taking their vehicles for servicing in that area. This is an important exercise that you might have to mandatory go through.

3. Type of vehicles - Whether you want to service any type of vehicle or a particular brand. If it is particular brand then you might go for a franchise type of thing also though that also requires a good initial investment and you have to abide by their condition of service area size and other requirements. Depending on this also you will have to hire the mechanics. Some mechanics are good in only in one particular model while some are capable of servicing different types also.

4. Type of services - There are many things which a customer requires today. You have to decide as which are the functions you will be able to provide and accordingly you have to have to get manpower and equipments for that. Some of the general services in the service station are like -
(a) Car wash service.
(b) Mechanical jobs like the engine, gear, accelerator, shock-absorber etc.
(c) Electrical jobs like horn, light etc.
(d) Car air conditioner service.
(e) Wheel balancing and alignment service.
(f) Oil change services like engine oil, gear oil, steering oil etc.
(g) Painting and denting.
(h) Battery service.
(i) Car body polish.

Above points can be taken in consideration before deciding the place and other modalities for this business. It is also evident that this type of business will require at least an initial capital expenditure of Rs 30-40 lakhs and a continuous working capital of Rs 60000 to 80000 per month. The rates of these services are already stabilised in the market and that you can get from other centres for your reference.