Emergence of multi-brand car service centres and future trends of automobile servicing in India

– As per IBEF 2017 stats, the Indian automobile industry is the 4th largest in the world. – Only 35% of out-of-warranty cars head back to authorised service stations. – Analysts predict a growth jump of the current 1% to 8% by the year 2020 for multi-brands.

multi brand car service india
Image for representational purpose only
multi brand car service india
Image for representational purpose only

As per the statistics by the Indian Brand Equity Foundation (IBEF), the Indian automobile industry, in 2017 became the 4th largest in the world. The sales registered reflected an increase of 9.5% year-on-year basis to over 4 billion units for the same year (excluding two-wheeler sales). Moreover, in terms of commercial vehicles, India currently stands as the 7th largest globally.

The Indian automobile service industry triad

Now, this high momentum automotive sector has birthed an equally high potential automobile service market. To give you a concise perspective, here is a quick drop-down view of the car servicing industry in India. The Indian car service industry can be classified into three very different verticals; the authorised service centres, unorganised local garages and the multi-brand network.

– The authorised service centres or more commonly known as “authorised” take care of car service and maintenance for a specific car company. These authorised service stations are brand-specific car service centres that operate as company-owned or as a franchisee.

– Then comes the unorganised local garages, which almost every Indian is pretty much aware of. These low-overhead, barely-equipped, bare-minimum makeshift car garages operate as an individually-owned establishment that offers car services at the cheapest possible rates.

– The newest entrant in this sector are the multi-brand car service centres. The multi-brand car service network is a result of the 65% out-of-warranty car users who were in search of a quality, affordable and flexible car service and maintenance alternative.

The dawn of the multi-brand car service centres

The multi-brand car service industry was actually born out of necessity; to act as a median between the authorised dealerships and the local garages. On one hand, the authorised dealership which enjoyed a pretty monopolised market where the car owner is restricted to avail services tendered only by the authorised service centre. The other side sits the local garages who find their existence as the cheapest automobile service provider. In fact, a greater chunk of their business comes from second-hand car owners looking to save some money on car maintenance.

According to market data, only 35% of all “post-warranty cars” head back to authorised service centres. The rest 65% of cars choose to go to multi-brand car service centres. The cost factor along with at-par or superior service quality is a pressing reason which actually pulls the average car owner from authorised dealerships to multi-brand car service centres.

Multi-brand car service centres very specifically cater to the overwhelming after-sales service and maintenance requirements of approximately 60 million cars that are plying on Indian roads. This network of workshops operate in an organised capacity similar to authorised service centres. Their workshops offer OEM (Original Equipment Manufacturer) standard car services utilising equipment, tools and machinery that are at par with the manufacturer set minimum recommendations. In a nutshell, multi-brands offer the same car service experience and quality but at a cost which is up to 40% less than authorised service centres.

Why multi-brands make sense

In the yesterdays, way before the arrival of the multi-brands, a car user basically had two choices for their car servicing needs; either drive into a company-mandated service centre or search for a nearby local garage.

An authorised dealership meant a costly affair involving mandatory replacements and to top it off; a suspiciously inflated bill. The only upside to visiting an authorised workshop is the peace of mind or very well an illusion of it. Driving-in to a local garage meant well for the pocket but ill for the car. These unorganised local garages, which survive on an infinitesimal budget, cut corners when it comes to service quality, spare parts and one should definitely throw transparency out of the window.

Catch up with auto news highlights from the year 2019 and what to expect from 2020 below:

Multi-brands offer the best of both worlds. For instance, multi-brands car service centres tender services for a myriad of car brands, you also get a warranty on car services along with genuine OEM and OES flexible spare parts. 100% transparency and accountability with upfront pricing is another forte.

Even motor insurance companies love multi-brand centres as they provide OEM-quality repairs at a cost way less than authorised dealerships. Moreover, the “Repair-Over-Replace” policy helps insurance companies keep their loss ratio in check, which is why you can now find cashless claim facility at multi-brand workshops.

Technology; an ace up the sleeve

Where authorised and local garages lag behind, the multi-brands make hay. The use of state-of-the-art technology has always been a vital resource for multi-brand networks to stay ahead of the curve. In this era of smart-everything, technology has helped make car services smart.

A user can now book their car service at the helm of a tap. Live end-to-end updates, service tracking, round-the-clock grievance redressal are some radical new features brought forward by multi-brands. At the backend, technology allows for centralised spare parts and inventory organisation, better lead segregation and customer management and all-in-all a seamless workflow. To sum it up, technology allows for a more hassle-free deployment of services.

How India’s used car market is beating the economic slowdown

The future of automobile servicing in India

The future of the after-sales car service market in India has seen a paradigm shift in the last few years. Up and coming new start-ups are witnessing a dramatic increase in popularity and acceptance, especially among millennials. The promise of quality, ease of use and the sheer convenience is what gives them the edge and leverage to grow more.

In fact, the overall growth rate for Multi-brands in the past years has been phenomenal. Data analysts globally predict a growth jump of the current 1% to 8% by the year 2020 for the multi-brand car service sector in India.

Author: Amit Bhasin, Co-founder, GoMechanic

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 28-12-2019 at 15:24 IST