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Multi-brand auto service centers are the future of India’s auto service industry
Posted on December 29, 2021
By Mr. Arvind Verma, Co-Founder, Vehicle Care
As the Indian auto industry returns to growth, the auto service industry is also poised to grow with multi-brand auto service driving the future trend.
“Refer to the figures”
The automotive industry contributes 7% of India’s GDP. Automobile production in 2021 was 92 million, and industry turnover by the end of 2021 is expected to be $ 2 trillion and cars sold by 2021 will be 75 million. In addition, the CAGR was 36.4% in FY 2015-FY20. As a result, the automotive service industry is rapidly gaining momentum to meet the growing demand of this large automotive population in the country.
Let’s understand the key factor guaranteeing a bright future for the multi-brand automotive services industry:
Increase in the number of out-of-warranty cars in India
The Indian auto industry is experiencing a trend of growth in the number of out-of-warranty cars, which is generating higher demand for multi-brand auto service companies in India. Market research data suggests that 65% of out-of-warranty cars visit multi-brand service centers in India while only 35% of post-warranty users return to authorized service centers.
To meet this ever-increasing demand, multi-brand automotive service stations, offering cost-effective but high-quality repairs. It offers 40% less compared to the authorized auto service center. So this is one of the main reasons why consumers turn to the multi-brand service center during the post-warranty period. The number of out-of-warranty cars is expected to experience a CAGR of 3% during the forecast period FY’20-FY’25.
Strong growth in used car sales
India sold around 4.4 million used cars in FY21, compared to 2.7 million new cars. In addition, used car sales are currently 1.5 times greater than new car sales, the gap is expected to widen in the coming years. Besides the used car market, it is also expected to cross 8 million by 2025.
In addition, the demand for 4 wheelers would continue to grow and would be mainly driven by a multitude of factors such as problems with the spread of the virus, level II and III cities will contribute significantly, due to an increase and easy financing options. more and more available, an increased need for mobility and as well the desire to own a car, which continues to perhaps still be one of the biggest engines.
This growth in used car sales will signal an increase in the average age of cars, thus influencing the growth of the related market that is the automotive services market.
Technological disruption at multi-brand service center in India
The Indian auto service market is also seeing an emergence of auto service startups, therefore, there is a consolidation of the huge unorganized auto repair garage service segment. Adopting cutting-edge technology has been a prerequisite for multi-brand networks to stay ahead of the game. Play it big on convenience Businesses synergize convenience for consumers, such as app-based tracking, live updates, tailor-made services and communication, transparency, ordering spare parts, l ‘Provides a warranty on automotive services as well as flexible OEM and OES spare parts. Full transparency and accountability with all upfront costs is another plus. The increased use and adoption of technology by players in this industry also enables easier deployment of services.
” A promising future “
The automotive after-sales service market in India after COVID-19 has seen a shift in speed over the past year. And 2022 will be a brighter future as the industry is on a growth path.
Start-ups operating in this niche will continue to experience an upward trend in popularity and acceptance, especially among millennials.
Synergistic factors such as excellence, ease of use and sheer convenience are what give these start-ups a competitive advantage and they are banking on these elements to grow further.
Overall, the tech-driven multi-brand auto service platforms in 2021 have been phenomenal and even the future is bright as data analysts predict the auto service industry to be worth by 2025. !