3M India has embarked on a massive expansion of its automotive products and services business in India. The company, which controls around 50% of the Rs 1,200 crore car detailing market in India, is set to open at least 100 car care centres each year over the next five years.
3M Car Care, the company's car detailing division is undertaking the expansion through a tie up with Oil Marketing Companies (OMCs). Its new car care or detailing centres will be set up at select fuel stations of Indian Oil Corporation (IOCL), Bharat Petroleum Corporation and Hindustan Petroleum Corporation in the country. The company has opted for a franchisee model for the expansion across cities, a top company official said.
“We pioneered car detailing service in 2011 with our own outlet. We are now expanding the network with franchisees. We have already tied up with IOCL to let out space in some of their select fuel stations out of a network of 26,000 fuel stations across the country. Of which, we will open car care centres in 500 stations in the next five years,” Ajay Jain, vice president, automotive aftermarket division, 3M India Limited told FE.
Currently, 3M India has a network of 73 centres in 17 cities, of which 16 are in Bengaluru. The company plans to take the network to 130 centres by end of 2016, he said. Jain said the company will not be making any capital investment in this model and its franchisees will put in money for the outlets. There will be two types of car care detailing centres — large format outlets having 2,500 sq ft to 3,500 sq ft and small outlets having 400-500 sq ft at fuel stations of IOCL. Each outlet will see an investment of Rs 15-20 lakh depending on the size, he said.
3M India will supply its automotive products. The company is currently running a pilot with four select outlets of IOCL and BPCL. It has opened the fifth store at an HPCL petrol station in Delhi's Dwaraka area. “Through our tie up with oil marketing companies, 3M India will offer car care facility, products and services to car owners at their convenience. This will be a win-win situation for 3M India and OMCs, which are looking at increasing their non-fuel revenues,” Jain said. Without giving details of revenue from the car care division, he said the expansion would contribute sizeable portion to its revenues.