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Understanding the Tyre Franchise Dealership Business

India has been witnessing an automobile boom in recent times, thanks to a flourishing economy and rising disposable income, India’s aspiring middle class relate their dreams with the vehicle they purchase. The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011. India is home to over 40 million vehicles and hence automotive franchises in India are bound to prosper as well. In this article we explore the business opportunity of tyre franchises.

Tyre franchises are essentially Company Authorized Tyre Dealership that provide for various services some of them including Electronic Wheel Balancing, wheel Alignment, sale and replacement of tyres and so on. For all those that are not fond of automobiles but are keen to understand what this really means, here is a quick snapshot for it.

Wheel Alignment consists of adjusting the angles of the wheels so that they are perpendicular to the ground and parallel to each other. The purpose of these adjustments is maximum tire life and a vehicle that tracks straight and true when driving along a straight and level road.  Wheel Balancing on the other hand allows the tires and wheels to spin without causing any vibrations.  This is accomplished by checking for any heavy spots on the wheel-tire combination and compensating for it by placing a measured lead weight on the opposite site of the wheel from where the heavy spot is.

There are several franchises / dealerships that are available, some of the popular options are Michelin, Yokohama, Continental, MRF, JK Tyres, Apollo Tyres, Bridgestone Ceat and so on.  

Michelin, Yokohama, Continental are a bit particular about their dealers and the service levels rendered to their customers, the others would be simply delighted to consider this as an option.

As a tyre serving franchisee, some of the key factors for your success are

Location: A good location adds to your advantage, the store also needs to be spacious to accommodate the wheel balancer equipment and alignment pit, a table, a couple of chairs and a tyre changer as well as space to stock tyres. Once you have shortlisted the company for their dealership business opportunity or a tyre franchise, you would then have to start procuring the equipment to get going. Often, companies determine the level of investment that is required but in some cases you may have the option of choosing your own.

Presuming that you could decide on the investment required, as a franchisee, you could keep your costs low. Get cheap second hand tyre changers, wheel balancers and wheel alignment machines. You can skip on the air conditioning and simply keep it basic, however not all car dealerships would be comfortable with the save-money approach.

Investment: On the lower side the aligner, balancer, changer and an air compressor will total to about Rs. 3 lakhs or so. Basic tools, jacks, digging the alignment pit, should at max stretch to about Rs. 1 Lakh, as a dealer you would need to add on the investment in stocks, company deposit if any and the cost of local permits and registrations, property deposit, furnishings and so on.

The other alternative is go for a top of the line tyre dealership. Invest in 3D wheel aligners from Hunter, balancers, tyre changers capable of fitting ultra low profile tyres on huge 21" rims without damage to the rim or tyre and with only one person needed! Nitrogen inflators, short lifts (these are lifts which lift the car just a foot or two off the ground so all 4 wheels can be removed at once.). Short lifts help a lot if you need to change all four tyres or need to rotate the tyres. You dont need to jack up each wheel separately at a time.

Get a super silent screw type air compressor. Get a generator so that even if there is no power your customers are not made to wait. Get a UPS as well.

Then there is the showroom part. If you are going this way, build a nice showroom. Doesnt have to be large, but class and quality are important. A nice granite or glass top table with a few chairs. A couch next to which you can keep a few magazines for the customers, etc... A TV connected to a DTH box showing either the latest news or the ongoing cricket match. Some speakers discreetly placed in the ceiling or at the corners of the showroom playing Worldspace to give a nice ambience to the place. Air conditioning is a must.

An internet cafe can also a nice touch. In this model, the equipment itself would cost you close to 25 lakhs. All brand new. Also, if you get pneumatic guns, it will help in cutting down the time taken to do the job. And if the technicians know their job well(they will learn over a period of time), there will not be too many complaints of jammed nuts and bolts. You will also need a decent sized storage area to store the tyres, alloy wheels, etc. You will need a nice display stand or something in the showroom to showcase some of the tyres and alloys.

Of course needless to mention, like all automotive franchises, you would also need a large parking space for cars to be serviced on standby.

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