Paper on the vision, marketing & operation strategies, growth plan, and financial viability of the car service startup – “Beficaar”

Abstract

The Indian automotive industry ranks 4th globally with respect to the valuation of the Automobile Industry in India, 2021 (Automobile Industry in India, 2021). Currently, the Indian automobile industry contributes 7.1% to India's GDP and generates employment for more than 37 million people – direct and indirect (Harshita Tyagi, 2021). The pandemic has buckled the trend of carpool and subscription ownership in metros and increased the usage of personal vehicles. Post pandemic increase in commodity prices like iron, aluminium, semiconductor chips etc., pushed prices of automobiles. Moreover, due to global supply chain issues and higher waiting times for cars, many customers have shifted to the pre-owned car market in India. Despite the economic slowdown and other externalities impacting the automotive industry, the used-car industry has shown a CAGR of 6.21% from FY16 to FY20 (Pre-owned car market report India 2021). In contrast, the new car industry has displayed muted growth. The recent increase in the fuel process has led to a higher cost of ownership of personal automobiles. The car owners are finding ways to circumvent the above rise in operational cost for cars (especially out-of-warranty cars) by preferring local unauthorised workshops that offer similar services at an approximately 40% cheaper rate with varying options. The fact that 2020 ushered in the ‘Rise of the Pre-Owned Car Industry’ in India opened the gate to higher opportunities for business inflow for Multi-branded Workshops (MBW) (we hereby will call them local garages) than Original Equipment Manufacturer (OEM) workshops, and this opportunity is mainly attributed due to the lower cost of vehicle maintenance at the local garages.