Multi-brand car service centers are the future of the car servicing industry in India

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As the Indian Automobile Industry resumes a growth story, the car servicing industry too is poised for growth with multi-brand car service driving the future trend.

‘Going by the numbers’

The Automobile industry contributes 7% to India’s GDP. Automobile production in 2021 stood at 92 million and the industry turnover by 2021 end is expected to be 2 trillion dollars and cars sold by 2021 will be 75 million.

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Also, the CAGR was 36.4% during FY’15- FY’20. Consequently, the car servicing business is fast picking momentum to cater to the growing demand of this large car population in the country.

Let’s understand the key factor pinning a bright future for the multi-brand car service industry:

The surging number of post-warranty cars in India.

India’s automotive industry is witnessing a growing trend in the number of post-warranty cars, resultantly it is generating higher demand for multi-brand car service companies in India. The market research data suggests that 65% of the post-warranty cars visit the multi-brand service centers in India whereas, only 35% of post warranty users head back to the authorized service centers.

To cater to this ever-increasing demand, the Multi-Brand car servicing stations, providing cost-effective yet high-quality repairs. It offers 40% less as compared to the authorized car service center. Hence it is one of the major reasons for consumers to switch to the multi-brand service center during the post-warranty period. The number of post-warranty cars is anticipated to witness a CAGR of 3% during the forecast period FY’20-FY’25.

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Strong Used Car Sales growth

India sold about 4.4 million used cars in FY21 compared to 2.7 million new cars. Also, pre-owned car sales are currently 1.5 times more than new car sales, the gap is set to increase in the coming years. Besides used car market is also anticipated to cross 8 million by 2025.

Moreover, Demand for 4-wheeler would continue to build up and will primarily be driven by a multitude of factors such as the virus spread concerns, Tier II and III cities will be contributing in a big way, owing to an increase and easy financing options becoming available, greater need for mobility and as well as the desire to own a car, which perhaps continues to be one of the biggest drivers still.

This growth in used car sales will signal a rise in the average age of cars, which will therefore influence the growth of the allied market which is the car service market.

Technology disruption in Multi Brand Service Center in India:

The Indian car service market is also experiencing an emergence of auto-tech servicing startups, consequently, there is a consolidation of the huge unorganized car repair garage segment of service. Adoption of state-of-the-art technology has been a prerequisite for multi-brand networks to stay ahead of the curve.

Playing big on convenience Companies are synergizing convenience for the consumers like app-based tracking, live updates, tailored services and communication, transparency, ordering spare parts, Offering a warranty on car services along with genuine OEM and OES flexible spare parts. Complete transparency and liability with all charges upfront is another benefit.

Also, an increase in the use and adoption of technology by the players in this industry is allowing for a more hassle-free deployment of services.

‘A promising future’

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The after-sales care service market in India post-COVID-19 has seen a gear shift in the last year. And 2022 will pin a brighter future as the industry is on a growth trajectory.

The start-ups operating in this niche will continue to witness an upward growth trend in popularity and acceptance, especially among millennials. 

Synergizing factors such as excellence, ease of use, and sheer convenience is what is letting these startups have a competitive advantage and they are riding high on these elements to grow more.

On the whole, tech-driven multi-brand car service platforms in the year 2021 have been phenomenal and even the future is promising as data analysts forecast that – Auto servicing sector is expected to be worth it by 2025.

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Arvind Verma
Arvind Verma
Arvind Verma is a Co-Founder of VehicleCare

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