The Automobile industry in India bags the 4th rank across the world. The industry includes vehicles such as cars, two-wheelers, trucks, buses and three-wheelers which play a very important role in our Indian economy. There has been a growing demand for vehicles due to a significant increase in the income of middle-class people.
India is expected to top the world in terms of car volumes by having approximately 611 million vehicles on Indian roads by the end of 2050. The GDP contribution from the automobile industry within the last decade was around 5%. Today India is being recognised as a potential player who is emerging in the auto market.
Maruti Suzuki India Limited
Maruti Suzuki dealership has primarily been one of the most favourite brands among the Indian population. The company otherwise known as Maruti Udyog Limited was founded in 1981.
They are one of the top automobile manufacturers and sellers in India and is a subsidiary which is owned by the Japanese car and motorcycle manufacturer called Suzuki Motor Corporation. They own a 56.21% stake of the company and 43.79% is traded on a public forum such as BSE: 532500, NSE: MARUTI. Maruti Suzuki has its headquarters in New Delhi.
The company is an automobile manufacturer and seller of many popular cars such as Ciaz, Ertiga, Wagon R, Alto K10, Swift, Baleno and many more.
History of Maruti Suzuki India Limited
Maruti Suzuki was established in February 1981 and started its production in 1983 with Maruti 700 which was made completely in India. The very first Maruti 700 unit was bought by Mr Harpal Singh a resident of Delhi and the keys of the car were handed over by Indira Gandhi the Prime Minister of India.
Maruti Udyog was merged with Suzuki Motor a Japanese automobile company in October 1982 with Mr R. C. Bhargava as the chairman of the company and Mr Kenichi Ayukawa as the CEO and Managing Director of the company.
Here is a list of Maruti Suzuki cars that were launched subsequently after Maruti 700.
- 1984 – Maruti Suzuki Omni
- 1985 – Maruti Suzuki Gypsy
- 1990 – Maruti Suzuki 1000
- 1993 – Maruti Suzuki Zen
- 1994 – Maruti Suzuki Esteem
- 1999 – Maruti Suzuki WagonR
- 2005 – Maruti Suzuki Swift
- 2007 – Maruti Suzuki Grand Vitara
- 2008 – Maruti Suzuki A-Star
- 2009 – Maruti Suzuki Ritz and Maruti Suzuki Eeco
- 2010 – Maruti Suzuki Alto K10
- 2011 – Maruti Suzuki Kizashi
- 2012 – Maruti Suzuki Ertiga
- 2012 – Maruti Suzuki Alto 800
- 2013 – Maruti Suzuki Stingray and Maruti Suzuki Celerio
- 2014 – Maruti Suzuki Ciaz
Maruti Suzuki has its foothold in all states and union territories of India with service centres in almost 1,454 cities and a sales network that is spread across 1,097 cities in India. The company also exports cars to Costa Rica, El Salvador, Chile, Guatemala, Morocco, Kenya, Europe, Ethiopia, Nepal, Sri Lanka and many more. The company is clearly the pioneer in the Indian Automobile Industry that has given a lot of people the joy of the wonderful driving experience.
What is the USP of Maruti Suzuki India Limited?
Presence of car models for every income segment
Maruti Suzuki dealership is one of the respected and well-recognised automobile manufacturer and seller for decades now. They are well-known for their hatchbacks and entry-level sedan segment. With the increase in income levels, the company has sold cars in every income segment possible thereby creating a strong foothold of around 45% in the market segment, making them the largest passenger car company in India. The Indian population has a wide array of cars to choose from ranging from a Maruti 800 to Ertiga to Ciaz to Ritz to Swift to Swift Desire to Maruti Suzuki Baleno RS and many more.
Strong brand presence and recognition in the automobile sector
Maruti Suzuki, India’s largest automobile manufacturer, as of 2018 has paved its way into the global Top 10 brand chart for the automobile sector and has now bagged the 9th position as the most valuable auto brand across the world.
The main reason for receiving such a huge recognition is because Nexa dealership outlets have managed to successfully put a perception of owning a luxury car without the price tag of luxury goods attached to it. Maruti Suzuki is the only India automobile manufacturer who has successfully created a strong brand presence for the highest valued global automobile makers.
What are the benefits of owning a Maruti Suzuki dealership?
You cannot have a second thought about Maruti Suzuki as this is the company who has sold the most number of vehicles in the Indian Automobile market segment. There are various other benefits attached to the dealership which are more than just manufacturing and selling vehicles.
- Maruti Suzuki not only means selling or repairing cars. It consists of numerous other value added services such as:
- Maruti Suzuki automobile financing
- Maruti Suzuki automobile insurance
- Maruti Suzuki car accessories
- True value shops for second-hand cars
- Different exchange offers
- Maruti driving schools
- Maruti Auto Card
- Maruti Suzuki leasing
- Maruti Suzuki genuine automobile parts
Maruti Suzuki offers a complete automobile product mix for anyone who has the desire or passion to be a franchise owner. Maruti Suzuki believes in one thing – the more the people, merrier the journey. This is the reason why the company is able to successfully offer satisfactory services to its customers across the nation.
What are the requirements for starting a Maruti Suzuki dealership?
The total built-up area required to set up a Maruti Suzuki dealership franchise is around 4000 Sq.Ft.
Skills or experience required
- The franchise owner must possess strong entrepreneurial and innovative skills
- The owner should be confident to bring a significant change in the business.
- The main goal of every employee should be excellent customer service
- It is not necessary to have prior experience in the automobile sector
Maruti Suzuki has got 3 manufacturing facilities in India. They are:
- The Gurgaon manufacturing facility which has three manufacturing plants spread over 300 acres.
- The Manesar manufacturing plant is spread over 600 acres.
- The Gujarat manufacturing plant is spread over 700 acres.
Maruti Suzuki is operational in numerous cities such as Mumbai, Delhi, Gurgaon, Bangalore, Kerala, Madhya Pradesh, Chattisgarh, Odisha, West Bengal, Jharkhand, Tamil Nadu, Pondicherry, Gujarat, Pune, Assam, Sikkim and many more
Training will be conducted at regular intervals by Maruti Suzuki expert team to make sure that all the employees are up-to-date with the guidelines of the company and how the business can grow and benefit all of them.
Minimum staff requirement
Approximately around 40-50 personnel are required.
How much does it cost to start a Maruti Suzuki dealership in India?
The cost for opening up a Maruti Suzuki dealership franchise is around 30 to 50 lakhs. The cost varies from one location to another, availability of the space required and nature of the business. It can either be a showroom or a service centre or both.
You need to also attach a demand draft of Rs.1 lakh in favour of Maruti Suzuki India Ltd payable at Delhi as earnest money while submitting your application form for the dealership.
Profitability explained through a hypothetical example
Total investment required for a car showroom = Rs.40,00,000
Expenses incurred in a month
- Rent paid for a 3500 Sq.ft of area fo the showroom = Rs.5,00,000
- Salaries paid to 10 employees (Rs.10,000*10) = Rs.1,00,000
- Miscellaneous expenses = Rs.50,000
Total expenses incurred in a month = Rs.6,50,000
Income earned in a month
- Number of customers who enters the showroom to buy a car = 10 people
- Average cost per car = Rs.4,00,000
Total income earned in a month = Rs.40,00,000 (Rs.4,00,000*10)
Gross profit for the month
Gross profit (30% of Rs.40,00,000) = Rs.12,00,000
Total profit for the month
Total profit for the month (Rs.12,00,000 – Rs.6,50,000) = Rs.5,50,000
You can get back your entire invested amount within 7-8 months period.
Maruti Suzuki is undoubtedly a brand icon as the company has always put customer satisfaction as its first priority. According to me, an entrepreneur or a businessman should completely analyse all the details before making any final decisions about owning a car deanship franchise. This is a crucial part because it is a huge amount of investment that has to be made and the person should be capable enough to do so and should be able to assess if the person has enough backup for any shortcomings.
Keeping all these pointers in mind Maruti Suzuki is definitely a profitable business as it offers services which go beyond selling and repairing of cars. It is because of its strong brand recognition that Maruti Suzuki dealership franchise owners are able to increase their profitability in the automobile sector.
The other reason is that Maruti Suzuki offers value-added services to its franchises and also provides adequate training to all its employees who are directly related to the automobile sale volume of the outlet.
With all the advantages mentioned above, the initial investment done by a person might be on the higher side but considering all the benefits that Maruti Suzuki car dealership provides the return-on-investment is high and the entire amount can be recovered in a short span of time.
Here is a list of the documents that are required to own a Maruti Suzuki dealership franchise:
- Current working details and experience of the person who wishes to own the franchise
- Demand draft of Rs.1 lakh
- Details about other family members to asses the capabilities of the candidate in financial terms
- CIBIL report of the person who wants to apply for the franchise
- Letter from the banker in the said Maruti Suzuki format
- The entire set of income tax details and last 3 years balance sheet and profit and loss account
- A map to prove that there will be no clash of business interests in the intended location for the franchise
- The structure of the Maruti Suzuki dealership
- Photos of the space for starting the franchise