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Multi-brand car servicing to grow

India’s car servicing industry is slated to be a Rs 33,000-crore business by 2020, up from Rs 20,000 crore now, and multi-brand servicing networks expect to grab at least eight per cent of the business by then.

The share of multi-brand car servicing in the US and EU is around 33 per cent.

Mahindra First Choice Services, part of the Mahindra Group's aftermarket division, plans to garner 50 per cent share of the multi-brand service industry by 2020. Another early entrant, MyTVS, intends to take its count of outlets to 500 by 2018 from 100 now.

Alok Kapoor, head of the marketing and franchise business at Mahindra First Choice Services, said, "Nearly 46 per cent of Indian cars are now serviced by service centres, 53 per cent by the unorganised sector, and only one per cent by multi-brand service centres."

Each of the 23.6 million off-warranty cars on Indian roads needs 2.5 services and 0.25 repairs a year, adding up to 65 million trips to the workshop. At an average cost of Rs 3,500 for a service and Rs 5,000 for repairs, the size of the car service industry is just above Rs 20,000 crore.

Mahindra First Choice has invested nearly Rs 200 crore since it entered the business in 2008. It initially operated through company-owned outlets and switched to franchises in 2014. It has around 100 workshops and plans to set up 50 more by April. Mahindra First Choice is targeting 1,200 workshops countrywide by 2020.

The company has been clocking steady growth in revenue, from Rs 30 crore in 203-14 to Rs 50 crore in 2014-15 and an estimated Rs 70 crore in 2015-16. "The real growth will come from 2016-17 when we will have a significant number of outlets. Our franchises are expected to invest around Rs 50-60 crore this year," Kapoor said.

The opportunity has drawn Rishab Bafna to set up Kar-Worx & Spa, a multi-brand car service company, in Mumbai in 2013. Kar-Worx, a subsidiary of the diversified Bafna Group, is looking at expanding to Pune by the first quarter of 2016.

Startups have sprung up in non-metro cities as well. Co-founded by an automobile engineer John D’costa, Carmechanixx is an e-workshop for servicing cars in Ahmedabad. Car owners can log into to its website or call in a mechanic for a service at a place and time convenient to them. The startup aims to service at least 1,000 cars per month initially.

“Our service offerings that include multi-brand car service have helped us to accelerate both expansion and business profitability," said G Srinivasa Raghavan, executive director, TVS Automobile Solutions.

THE SERVICING WORLD Rs 20,000 cr is the car-servicing industry size in India
  46% organised service centers are there
  53% unorganised players
  1% multi-brand organised servicing players
  Rs 33,000 cr is the estimated growth of industry by 2020
  8% is the rise of shares of multi-brand organised servicing players expected to be by 2020
  2.5 is the no of mechanical services per year needed by each car on an average
  0.25 accident service per year needed by each car
  30 mn cars on Indian roads
  28 mn cars are road-worthy
  5 mn cars in warranty;
  23.6 mn off-warranty cars need total 65 mn services every year