In FY21, India produced 22.65 million vehicles, with 13 million vehicles produced between April and October of that year. Due to a growing middle class and a large part of India’s population is young, the two-wheeler category dominates the market in terms of volume. Furthermore, the sector’s expansion was assisted by firms’ increased interest in investigating rural markets. So learn from the experts about Expanding an Automobile Business through Franchising.
India is a major auto exporter, with excellent export growth prospects soon. In addition, many initiatives by the Indian government and major vehicle manufacturers are expected to propel India to the forefront of the global two-wheeler and four-wheeler markets by 2022. All categories grew in the calendar year (CY) 2021, with overall sales increasing 5.8% to 18.49 million units, compared to 17.47 million units in January-December 2020.
From 2.43 million units in CY20 to 3.08 million units in CY21, passenger vehicle sales climbed by 26.6 percent to 3.08 million units. The total number of commercial vehicles sold was 677,119, up 34% from the previous year’s figure of 505,102.
Because this industry is quickly expanding, you may be wondering if franchising my automotive company will help it grow. You’re quite correct; it will.
Some of the benefits of franchising in the automotive industry are listed below. We value your time, so let’s get started without wasting it.
The Advantages of Franchising in the Automotive Sector – If You Want to Franchise Your Business
The following are some of the benefits of franchising your business:
Capitalized Expansion – Expansion necessitates the input of capital and resources, which are often restricted and difficult to come by for many successful business owners. Franchising is a method of capitalizing on the expansion of a successful firm. Franchisees invest their own money rather than borrowing money from lenders to build their firm.
Continual Revenue Streams — Successful franchisors profit from ongoing royalties, which are typically calculated as a percentage of gross franchise sales and paid monthly.
Brand Development — Franchising multi-unit growth helps to complement and expand the value of your brand. Contributions by franchisees to local and regional advertising help to increase brand recognition.
Economies of Scale – When the multi-unit expansion is correctly handled, it leads to increased volume purchases and leverage with company suppliers and vendors.
Managerial Ability – Franchisee owners, who have put their own money and savings into the firm, are usually stronger managers and operators than hired staff who do not have a stake in the company.
Now that you’re aware of the benefits of franchising in the automotive industry, we’ve listed some of the ways that businesses can benefit from new opportunities in the industry.
What are some ways that firms might profit from new prospects in the automotive industry?
The following are some of the ways that businesses might profit from new opportunities in the automotive industry:
Taking advantage of the fast-evolving automobile sector for commercial gain.
The automobile business is evolving at a greater rate than it has ever been before. This opens fresh chances for both existing automotive supply chain companies (where ‘business as usual simply isn’t an option) and companies that don’t already provide into automotive – such as those in the energy and technology industries. Businesses that introduce disruptive technology, such as Tesla, have a real possibility of breaking into the mainstream. Small technology companies also have more opportunities to work with large OEMs, as carmakers no longer have all of the necessary expertise in-house.
Emissions reduction and the transition to electric cars
In addition to climate change, air quality in the world’s developing urban centers has become a major political concern, and reducing car emissions is considered an easy way to address this.
This has resulted in a variety of outcomes. The industry was already moving toward an electric future, but this announcement has heightened awareness of electric vehicles as a viable option. Batteries, electric motors, and power electronics are just a few of the areas where supply chain companies might profit.
Is it necessary to be an expert in battery chemistry to be a part of the battery supply chain, for example? No. Batteries are modules made up of cells that are assembled into a pack. The finished battery pack is made up of a variety of different components, including steel battery cases. A Tier 1 battery supply chain in India has a lot of potential, and thousands of people will need to be trained in dealing with this new technology, including design, engineering, sales, after-sales support, and recycling.
There is another potential in the hydrogen field, in addition to battery electric vehicles.
What should an automotive company expect from a Franchisee?
Franchisees should be knowledgeable about the brand and its reputation, and they should follow the company’s culture when working. Because they represent the firm, they must adhere to the HR policies and service standards that the brand is known for. It’s just as vital to hire and train the right people because any failure in the areas mentioned above will have a direct impact on the brand’s reputation. Everything comes into place if the franchisee is the right fit for the brand; if not, no amount of rules and regulations will assist.
Finally, people who want to franchise their automotive firm should build their business structure in such a way that all client-related, professional, organizational, and other decisions are made, and franchising looks to be one of the most favorable ways to accomplish so.
sparkle★minds has more than 20 years of franchising experience and can help you franchise your Automotive Business in India both locally and abroad. You can reach out to us right now if you need help franchising your automotive Business in India!
