With a population of 1.324 billion as of 2016, india remains a vibrant market for whatever goods or services an entrepreneur decides to go into and if you are interested in starting a business in India, one of your options is to open a car dealership shop; a place where both used and new cars will be retailed. It is indeed a thriving and profitable business in India especially with the growing population of the middle class.
If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services amongst others.
The truth is that it is one thing to have a fantastic business plan, but it is another thing for the business plan to translate to profits, which is why it is important to assemble a team of dedicated workers to work with if you want to be successful with your car dealership business.
Below is a sample car dealership business plan template in India that will help you successfully write yours with little or no stress.
A Sample Car Dealership Business Plan Template India
1. Industry Overview
Players in the car dealership industry sell both brand new and used cars and they may fall into any of the following niche areas; brick and mortar car dealership shop, online used cars dealership shop, locally produced car dealership shop, imported car dealership shop, luxury car dealership business and multi – brand and multi – maker car dealership.
The auto industry in India is one of the leading auto industries in the globe. As a matter of fact, the auto industry contributes 7.1 per cent of the country’s Gross Domestic Product (GDP). The Two Wheeler segment with 80 percent market share is the leader of the Indian Automobile market owing to a growing middle class.
Additionally, the growing interest of companies in exploring the rural markets further helped the growth of the sector and the overall Passenger Vehicle (PV) segment has 14 percent market share.
Statistics has it that about 4 million cars are manufactured in India, one of Asia’s largest markets in the 2015/2016 fiscal year. The automotive industry in India is growing and becoming more important for Indian citizens with 14.9 million jobs projected to exist by 2022.
India is also one of the leading auto exporters in the world with positive export growth potentials going forward. Lastly, starting a car dealership business just like starting any other business might not be easy but it is a straight – forward business that can generate huge and steady profits if well positioned and properly managed.
People often think that starting this type of business does not require any professional skills; in as much as it is true, you would still need a good knowledge of automobiles, good business skills, bargaining skills and of course customer services skills if indeed you want to build a profitable car dealership business.
2. Executive Summary
Raj Ravi Khan® Car Dealership, Inc. is a registered car dealership shop that will be located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We have been able to lease a facility that is big enough (a 4 thousand square foot facility) to fit into the kind of standard car dealership shop that we intend opening.
At Raj Ravi Khan® Car Dealership, Inc., we will be involved in the sale of both brand new and used cars from different manufacturers from India and abroad. We are set to service a wide range of clientele in and around Mumbai – Maharashtra.
We are aware that there are several car dealership shops all around Mumbai – Maharashtra, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors. We have an online service option for our customers, and our garage is well secured with various payments of options.
Raj Ravi Khan® Car Dealership, Inc. will ensure that all our customers are given first class treatment whenever they visit our garage. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved in the selection of car brands that will be in our garage.
Raj Ravi Khan® Car Dealership, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize us.
Raj Ravi Khan® Car Dealership, Inc. is a family business that is owned by Raj Ravi Khan and his immediate family members. Raj Ravi Khan is an auto freak with good knowledge of various car brands manufactured both in India and abroad.
He has a robust business network with a host of car manufacturing companies in India. Raj Ravi Khan has plans to open Raj Ravi Khan® Car Dealership, Inc. all across the 29 states and 7 union territories (including a national capital territory) in India.
3. Our Products and Services
Raj Ravi Khan® Car Dealership, Inc. is in the car dealership industry to service a wide range of clients and of course to make profits, which is why we will make available a wide range of both brand new and used cars from top manufacturing brands in India and other countries of the world.
We will ensure that we do all that is permitted by the law of India to achieve our aim and objectives of starting the business.
4. Our Mission and Vision Statement
- Our vision is to build a car dealership business that will become the number one choice for both corporate clients and individual clients in the whole of India.
- Our mission is to establish a car dealership garage business that will make available a wide range of cars from top manufacturing brands at affordable prices to the residents of Mumbai and across all the States in India where we intend opening our car dealership garages and franchise.
Our Business Structure
Our intention of starting a car dealership business is to build a standard car dealership garage in Mumbai – Maharashtra. Although our car dealership garage business might not be one of the biggest in India, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.
We will make sure that we recruit people that are qualified, honest, customer centric and are ready to work to help us build a prosperous car dealership business that will benefit all our stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
- Garage Manager
- Human Resources and Amin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
- Accountants
- Sales Agents/Customer Services Executive
- Cleaners
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office cum business activities.
Garage Manager:
- Responsible for managing the daily activities in the car garage
- Ensures that proper records of cars are kept and the garage does not run out of used cars
- Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
- Controls car distribution and supply chain inventory
- Supervises the workforce in the car garage sales floor
Merchandise Manager
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Helps to ensure consistent quality of cars from different manufacturers are purchased and retailed in good price that will ensure we make good profit
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Information Technologist
- Manages the organization website
- Handles eCommerce aspect of the business
- Responsible for installing and maintenance of computer software and hardware for the organization
- Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
- Manages the organization’s CCTV
- Handles any other technological and IT related duties.
Accountant
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
Cleaners:
- Responsible for cleaning and washing all the cars in the garage at all times
- Ensures that toiletries and supplies don’t run out of stock
- Handles any other duty as assigned by the garage manager
6. SWOT Analysis
Our major aim of starting just one outlet of our car dealership shop in Mumbai – Maharashtra is to test run the business for a period of 7 years to know if we will invest more money, expand the business and then open other outlets in India.
We are quite aware that there are several car dealership garages all over Mumbai – Maharashtra and even in the same location where we have plans to open ours, which is why we are following the due process of establishing a business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Raj Ravi Khan® Car Dealership, Inc. employed the services of an expert HR and Business Analyst with bias in car dealerships to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Raj Ravi Khan® Car Dealership, Inc.;
- Strength:
Our business location, the business model we will be operating, varieties of payment options, wide range of both brand new and used cars from different manufacturing brands and our excellent customer service culture will definitely count as a strong strength for Raj Ravi Khan® Car Dealership, Inc.
- Weakness:
From our findings, one major weakness that may work against us is the fact that we are a new car dealership garage in Mumbai – Maharashtra and we don’t have the financial capacity to compete with multi – million car garages that can afford to purchase fleets of cars in one fell swoop.
- Opportunities:
A population of over 1.3 billion people and a growing population of the middle class in India provide us with unlimited opportunities to sell our cars to a large number of individuals and corporate organizations. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our car garage; we are well positioned to take on the opportunities that will come our way.
- Threat:
Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new car dealership outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat to businesses such as ours.
7. MARKET ANALYSIS
- Market Trends
The trend in India shows that the auto industry is set to witness major changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission and safety norms amongst other.
Electric cars in India are expected to get new green number plates and may also get free parking for three years along with toll waivers. India’s electric vehicle (EV) sales increased 37.5 per cent to 22,000 units during FY 2015-16 and are projected to rise further on the back of cheaper energy storage costs and the Government of India’s vision to see six million electric and hybrid vehicles in India in the nearest future.
If you have ever taken your time to study car patronage and usage in India, you will have noticed that Indians especially the middle class make use of cars that are manufactured in India. This goes to show that there is a thriving business for car manufacturers in India.
One notable trend in the car dealership industry is that most car dealers are leveraging on online stores to sell their used cars to a large market.
The used car dealership garage landscape has seen tremendous changes in the last 20 years; it has grown from smaller outlets to a more organized and far reaching venture. The introduction of franchise and online car dealership makes it easier for a car dealership garage to reach out to a larger market far beyond the areas where their physical store is located.
8. Our Target Market
Those who purchase cars cut across all genders above 18 years; hence the target market for car dealership business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who desire to own a car.
In view of that, we have positioned our car dealership garage to service the residents of Mumbai – Maharashtra and every other location where outlets of our car dealership garage will be located. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.
We are in business to retail a wide range of cars to the following groups of people and corporate organizations;
- Students
- Middle Class Families
- Upper Class Families
- Corporate Organizations
- Celebrities
- Corporate Executives
A close study of the global car dealership industry reveals that the market has become much more intensely competitive over the last decade especially with the advent of online car dealership stores. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.
We are aware of the competition and we are prepared to compete favorably with other leading car dealership garages in Mumbai – Maharashtra and throughout major cities in India.
Raj Ravi Khan® Car Dealership, Inc. is launching a standard car dealership garage that will indeed become the preferred choice for people who live and work in Mumbai – Maharashtra and every other location where our outlets will be opened.
Our car dealership garage is located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We will ensure that we have a wide range of cars brands from leading manufacturers both in India and abroad in our garage at all times. It will be difficult for customers to visit our garage and not see the type of car they are looking for.
One of our business goals is to make Raj Ravi Khan® Car Dealership, Inc. a one stop car dealership shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Raj Ravi Khan® Car Dealership, Inc. is in business to retail a wide range of both brand new and used cars to people in Mumbai – Maharashtra and every other location where we intend opening our outlets. Our source of income will be the retailing of a wide range of cars from different car manufacturing brands at affordable prices.
10. Sales Forecast
One thing is certain when it comes to car dealership business, if your garage has various brands of new and used cars from different manufacturing brands and is centrally positioned, you will always attract customers that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in and around Mumbai – Maharashtra and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow the business and our clientele base.
We have been able to critically examine the car dealership industry in India, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Mumbai – India.
- First Fiscal Year: INRs. 8 Million
- Second Fiscal Year: INRs. 18 Million
- Third Fiscal Year: INRs. 26 Million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Raj Ravi Khan® Car Dealership, Inc. we conducted thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for people and organizations in and around Mumbai – Maharashtra and every location where we intend opening our outlets.
We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
We hired experts who have good understanding of the car dealership industry in India to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Mumbai – Maharashtra, India.
In summary, Raj Ravi Khan® Car Dealership, Inc. will adopt the following sales and marketing approach to win customers over;
- Open our car dealership garage in a grand style with a party for all to attract people who live around our car dealership garage
- Introduce our car dealership garage by sending introductory letters alongside our brochure to households, corporate organizations, businesses and other key stakeholders in and around Mumbai – Maharashtra
- Ensure that we have a wide range of both brand new and used cars from different brands at all times.
- Make use of attractive hand bills to create awareness and also to give direction to our garage
- Position our signage/flexi banners at strategic places around Mumbai – Maharashtra, India
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage in roadshows within our neighborhood to create awareness for our car garage
- List our business and products on yellow pages’ ads (local directories)
- Leverage on the internet to promote our business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
In spite of the fact that our car dealership garage is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our car dealership garage. Raj Ravi Khan® Car Dealership, Inc. has a long-term plan of opening our car garages in various locations all around key cities in India which is why we will deliberately build our brand to be well accepted in Mumbai – Maharashtra before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Raj Ravi Khan® Car Dealership, Inc.;
- Place adverts on community based auto newspapers, radio and TV stations.
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Mumbai – Maharashtra
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our cars dealership business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
We are aware of the pricing trend in the car dealership industry which is why we have decided to build robust business relationship with car manufacturers in India so as to enable us get cars at good prices and also sell at good prices.
In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our cars are sold a little bit below the average price of various car brands in India. We have put in place business strategies that will help us run on low profit for a period of 6 months; it is a way of encouraging people to buy into our car dealership brand.
We know we don’t have the capacity to compete with big players in the car dealership industry but we will ensure that the prices and quality of all the cars that are available in our garage are competitive with what is obtainable amongst car garages within our level.
- Payment Options
The payment policy adopted by Raj Ravi Khan® Car Dealership, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of India.
Here are the payment options that Raj Ravi Khan® Car Dealership, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for our cars without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our cars.
13. Startup Expenditure (Budget)
From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive car dealership business in Mumbai – Maharashtra, India and here are the key areas where we will spend our startup capital;
- The total fee for registering the business in India – INRs. 9,200
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – INRs. 15,700.
- Marketing promotion expenses for the grand opening of Raj Ravi Khan® Car Dealership, Inc. in the amount of INRs. 13,000 and as well as flyer printing (2,000 flyers at INRs. 1.00 per copy) for the total amount of INRs. 8,980.
- The cost for hiring business consultant – INRs. 4,000
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – INRs. 15,000
- The cost for payment of rent for 12 months at INRs. 6.00 per square feet in the total amount of INRs. 200,000
- The cost for garage remodeling – INRs. 50,000.
- Other start-up expenses including stationery (INRs. 3,000) and phone and utility deposits (INRs. 11,000).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – INRs. 260,000
- The cost for start-up inventory (stocking with a wide range of brand new and used cars from different manufacturing brands) – INRs. 12 Million
- The cost for store equipment (cash register, security, ventilation, signage) – INRs. 23,750
- The cost of purchase and installation of CCTVs: INRs. 10,000
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): INRs. 50,000.
- The cost of launching a website: INRs. 7,000
- The cost for our opening party: INRs. 29,000
- Miscellaneous: INRs. 10,000
We would need an estimate of INRs. 12.5 million to successfully set up our standard car dealership garage in Mumbai – India.
Generating Startup Capital for Raj Ravi Khan® Car Dealership, Inc.
Raj Ravi Khan® Car Dealership, Inc. is a private registered business that is solely owned and financed by Raj Ravi Khan and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about INRs. 2.5 million (Personal savings INRs. 2 million and soft loan from family members INRs. 500,000) and we are at the final stages of obtaining a loan facility of INRs. 10 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Raj Ravi Khan® Car Dealership, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of cars a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Raj Ravi Khan® Car Dealership, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and remodeling the garage: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party planning: In Progress
- Compilation of list of cars available in our garage: Car Dealership Business Plan
- Establishing business relationships with manufacturers of cars in India and abroad, used car auction houses in India and abroad and other car dealership garages in and around Mumbai – Maharashtra, India: In Progress