INTRODUCTION
Vehicle repair has undergone a massive transformation over the years. Such enterprises not only involve necessary repairs but also aesthetic upgrades that the customer might wish for. This can range from custom paint, and stylized visors, to music systems, LED lights, etc. The enterprise also has an extensive customer base for general maintenance of vehicles as well. Such an enterprise has a high earning potential and attracts a premium on the service being delivered as it requires one to be highly skilled and with the necessary expertise.
MARKET POTENTIAL
Vehicle Repair is a growing industry as the number of people owning cars and motorcycles has expanded in recent years. Overall, domestic automobile sales increased at 1.29% CAGR between 2016 and 2020 with 21.55 million vehicles being sold in FY2020. Because car servicing and maintenance are required regularly, such businesses provide a consistent stream of income. Quick and easy access to major road networks, and nearby larger markets increases the number of customers that can be serviced. The country’s automobile repair market is predicted to expand to INR 1800 billion by 2030, up from INR 600 billion in 2020 (at a CAGR of 12%).
FUNDING SOURCE
Under the “Work 4 Progress” programme of the Development Alternatives Group, such enterprises have been financed by Sankalp Swashakti Mahila Mandal and Sakhi Saheli Tejaswini Mahasang (Cluster Level Federations), and SKS (Micro Finance Institution), with an average loan size of INR 45,000.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
| MACHINERY & EQUIPMENT | AMOUNT (in INR) |
| Repairing toolkit | 8,000 |
| Compressor Machine | 35,000 |
| Power Generator | 30,000 |
| Vehicle Toolbox | 2,000 |
| Water Drum | 700 |
| Hydraulic Jack | 2,500 |
| TOTAL | 78,200 |
WORKING CAPITAL (for a 2-month cycle)
| RAW MATERIAL & CONSUMABLES | AMOUNT (in INR) |
| Nuts and Bolts (500 pcs @ INR 12/piece) | 6,000 |
| Puncture Patch (1 pack includes 20 patches) (10 packs @ INR 50/pack) | 500 |
| Car Tyre Tube (24 pcs @ INR 500/piece) | 12,000 |
| Motorbike Tyre Tube (24 pcs @ INR 500/piece) | 12,000 |
| Truck/lorry Tyre Tube (12 pcs @ INR 750/piece) | 9,000 |
| Engine Oil (50 units @ INR 500/unit) | 25,000 |
| Coolant (20 units @ INR 300/unit) | 6,000 |
| Car Wax (10 units @ INR 250/unit) | 2,500 |
| Car Freshener Spray (2 cans @ INR 250/can) | 500 |
| Distilled Water for Lead Acid Battery (5L) (40 units @ INR 300/unit) | 12,000 |
| STAFF AND LABOUR | AMOUNT (in INR) |
| Entrepreneur’s Salary (@ INR 10,000/month) | 20,000 |
| One Full-time Worker (@ INR 7,000/month) | 14,000 |
| UTILITIES & OTHER EXPENSES | AMOUNT (in INR) |
| Water Camper | 4,000 |
| Rent | 6,000 |
| Electricity | 4,000 |
| Repair and Maintenance | 2,000 |
| TOTAL | 1,35,500 |
FINANCIAL SUMMARY (Annual)
| FINANCIALS | AMOUNT (in INR) |
| Fixed Cost | 78,200 |
| Working Capital (for each cycle of 2 months duration) | 1,35,500 |
| Total Enterprise Cost | 2,13,700 |
| Annual Revenue | 8,35,800 |
| Total Expenditure (annual working capital) | 8,13,000 |
| Enterprise Profit | 22,800 |
| Payback Period (in months) | 41 |
BASIC ASSUMPTIONS
- Working days: 25 days per month (8 hours shift)
- Enterprise is operational throughout the year
- Loan not taken into account
- Revenue break-up for the cycle is as follows
| Products | Quantity | Selling Price/Product | Amount(in INR) |
| (in INR) | Amount | 500 | 50,000 |
| (in INR) | 30 | 2,000 | 60,000 |
| Car and Tube Tyre Replacement | 48 | 800 | 38,400 |
| Truck Tube Tyre Replacement | 12 | 1,200 | 14,400 |
| Puncture patch | 200 | 30 | 6,000 |
| Car Servicing | 40 | 1000 | 40,000 |
| Custom Repair Jobs (consultationand man hours, not including specialorders for parts) | 80 | 500 | 40,000 |
| Air Refilling | 100 | 5 | 500 |
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
Santosh Vishwakarma laid his hands on various businesses, but ultimately settled with a repair shop. From repairing watches to TV sets to tractors, he finally found himself passionate towards repairing vehicles. He started his vehicle repair enterprise in 2017 in Niwari, Uttar Pradesh. He attended ILO certified “Start your Business” training to boost his business skills. Through his enterprise he could:
- Make an annual profit of INR 90,000
- Employ 5 residents of his village
- Add a welding enterprise to his business