dealership business plan in india

Writing a Car Dealership Business Plan [Sample Template]

By: Author Tony Martins Ajaero

With a population of 1.324 billion as of 2016, india remains a vibrant market for whatever goods or services an entrepreneur decides to go into and if you are interested in starting a business in India, one of your options is to open a car dealership shop; a place where both used and new cars will be retailed. It is indeed a thriving and profitable business in India especially with the growing population of the middle class.

If you are sure this type of business is what you truly want to do after you must have conducted your feasibility studies and market research, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services amongst others.

The truth is that it is one thing to have a fantastic business plan, but it is another thing for the business plan to translate to profits, which is why it is important to assemble a team of dedicated workers to work with if you want to be successful with your car dealership business.

Below is a sample car dealership business plan template in India that will help you successfully write yours with little or no stress.

A Sample Car Dealership Business Plan Template India

1. industry overview.

Players in the car dealership industry sell both brand new and used cars and they may fall into any of the following niche areas; brick and mortar car dealership shop, online used cars dealership shop, locally produced car dealership shop, imported car dealership shop, luxury car dealership business and multi – brand and multi – maker car dealership.

The auto industry in India is one of the leading auto industries in the globe. As a matter of fact, the auto industry contributes 7.1 per cent of the country’s Gross Domestic Product (GDP). The Two Wheeler segment with 80 percent market share is the leader of the Indian Automobile market owing to a growing middle class.

Additionally, the growing interest of companies in exploring the rural markets further helped the growth of the sector and the overall Passenger Vehicle (PV) segment has 14 percent market share.

Statistics has it that about 4 million cars are manufactured in India, one of Asia’s largest markets in the 2015/2016 fiscal year. The automotive industry in India is growing and becoming more important for Indian citizens with 14.9 million jobs projected to exist by 2022.

India is also one of the leading auto exporters in the world with positive export growth potentials going forward. Lastly, starting a car dealership business just like starting any other business might not be easy but it is a straight – forward business that can generate huge and steady profits if well positioned and properly managed.

People often think that starting this type of business does not require any professional skills; in as much as it is true, you would still need a good knowledge of automobiles, good business skills, bargaining skills and of course customer services skills if indeed you want to build a profitable car dealership business.

2. Executive Summary

Raj Ravi Khan® Car Dealership, Inc. is a registered car dealership shop that will be located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We have been able to lease a facility that is big enough (a 4 thousand square foot facility) to fit into the kind of standard car dealership shop that we intend opening.

At Raj Ravi Khan® Car Dealership, Inc., we will be involved in the sale of both brand new and used cars from different manufacturers from India and abroad. We are set to service a wide range of clientele in and around Mumbai – Maharashtra.

We are aware that there are several car dealership shops all around Mumbai – Maharashtra, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors. We have an online service option for our customers, and our garage is well secured with various payments of options.

Raj Ravi Khan® Car Dealership, Inc. will ensure that all our customers are given first class treatment whenever they visit our garage. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved in the selection of car brands that will be in our garage.

Raj Ravi Khan® Car Dealership, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize us.

Raj Ravi Khan® Car Dealership, Inc. is a family business that is owned by Raj Ravi Khan and his immediate family members. Raj Ravi Khan is an auto freak with good knowledge of various car brands manufactured both in India and abroad.

He has a robust business network with a host of car manufacturing companies in India. Raj Ravi Khan has plans to open Raj Ravi Khan® Car Dealership, Inc. all across the 29 states and 7 union territories (including a national capital territory) in India.

3. Our Products and Services

Raj Ravi Khan® Car Dealership, Inc. is in the car dealership industry to service a wide range of clients and of course to make profits, which is why we will make available a wide range of both brand new and used cars from top manufacturing brands in India and other countries of the world.

We will ensure that we do all that is permitted by the law of India to achieve our aim and objectives of starting the business.

4. Our Mission and Vision Statement

• Our vision is to build a car dealership business that will become the number one choice for both corporate clients and individual clients in the whole of India.
• Our mission is to establish a car dealership garage business that will make available a wide range of cars from top manufacturing brands at affordable prices to the residents of Mumbai and across all the States in India where we intend opening our car dealership garages and franchise.

Our Business Structure

Our intention of starting a car dealership business is to build a standard car dealership garage in Mumbai – Maharashtra. Although our car dealership garage business might not be one of the biggest in India, but will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will make sure that we recruit people that are qualified, honest, customer centric and are ready to work to help us build a prosperous car dealership business that will benefit all our stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Garage Manager
• Human Resources and Amin Manager
• Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants
• Sales Agents/Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office cum business activities.

Garage Manager:

• Responsible for managing the daily activities in the car garage
• Ensures that proper records of cars are kept and the garage does not run out of used cars
• Ensures that the garage facility is in tip top shape and cars are properly arranged and easy to locate
• Controls car distribution and supply chain inventory
• Supervises the workforce in the car garage sales floor

Merchandise Manager

• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of cars from different manufacturers are purchased and retailed in good price that will ensure we make good profit
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Manages the organization website
• Handles eCommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant 

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries
• Responsible for cleaning and washing all the cars in the garage at all times
• Ensures that toiletries and supplies don’t run out of stock
• Handles any other duty as assigned by the garage manager

6. SWOT Analysis

Our major aim of starting just one outlet of our car dealership shop in Mumbai – Maharashtra is to test run the business for a period of 7 years to know if we will invest more money, expand the business and then open other outlets in India.

We are quite aware that there are several car dealership garages all over Mumbai – Maharashtra and even in the same location where we have plans to open ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Raj Ravi Khan® Car Dealership, Inc. employed the services of an expert HR and Business Analyst with bias in car dealerships to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Raj Ravi Khan® Car Dealership, Inc.;

Our business location, the business model we will be operating, varieties of payment options, wide range of both brand new and used cars from different manufacturing brands and our excellent customer service culture will definitely count as a strong strength for Raj Ravi Khan® Car Dealership, Inc.

From our findings, one major weakness that may work against us is the fact that we are a new car dealership garage in Mumbai – Maharashtra and we don’t have the financial capacity to compete with multi – million car garages that can afford to purchase fleets of cars in one fell swoop.

• Opportunities:

A population of over 1.3 billion people and a growing population of the middle class in India provide us with unlimited opportunities to sell our cars to a large number of individuals and corporate organizations. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our car garage; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power. Another threat that may likely confront us is the arrival of a new car dealership outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

The trend in India shows that the auto industry is set to witness major changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission and safety norms amongst other.

Electric cars in India are expected to get new green number plates and may also get free parking for three years along with toll waivers. India’s electric vehicle (EV) sales increased 37.5 per cent to 22,000 units during FY 2015-16 and are projected to rise further on the back of cheaper energy storage costs and the Government of India’s vision to see six million electric and hybrid vehicles in India in the nearest future.

If you have ever taken your time to study car patronage and usage in India, you will have noticed that Indians especially the middle class make use of cars that are manufactured in India. This goes to show that there is a thriving business for car manufacturers in India.

One notable trend in the car dealership industry is that most car dealers are leveraging on online stores to sell their used cars to a large market.

The used car dealership garage landscape has seen tremendous changes in the last 20 years; it has grown from smaller outlets to a more organized and far reaching venture. The introduction of franchise and online car dealership makes it easier for a car dealership garage to reach out to a larger market far beyond the areas where their physical store is located.

8. Our Target Market

Those who purchase cars cut across all genders above 18 years; hence the target market for car dealership business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who desire to own a car.

In view of that, we have positioned our car dealership garage to service the residents of Mumbai – Maharashtra and every other location where outlets of our car dealership garage will be located. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We are in business to retail a wide range of cars to the following groups of people and corporate organizations;

• Middle Class Families
• Upper Class Families
• Corporate Organizations
• Celebrities
• Corporate Executives

Our Competitive Advantage

A close study of the global car dealership industry reveals that the market has become much more intensely competitive over the last decade especially with the advent of online car dealership stores. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the competition and we are prepared to compete favorably with other leading car dealership garages in Mumbai – Maharashtra and throughout major cities in India.

Raj Ravi Khan® Car Dealership, Inc. is launching a standard car dealership garage that will indeed become the preferred choice for people who live and work in Mumbai – Maharashtra and every other location where our outlets will be opened.

Our car dealership garage is located in one of the busiest business districts in the city center in Mumbai – Maharashtra. We will ensure that we have a wide range of cars brands from leading manufacturers both in India and abroad in our garage at all times. It will be difficult for customers to visit our garage and not see the type of car they are looking for.

One of our business goals is to make Raj Ravi Khan® Car Dealership, Inc. a one stop car dealership shop. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Raj Ravi Khan® Car Dealership, Inc. is in business to retail a wide range of both brand new and used cars to people in Mumbai – Maharashtra and every other location where we intend opening our outlets. Our source of income will be the retailing of a wide range of cars from different car manufacturing brands at affordable prices.

10. Sales Forecast

One thing is certain when it comes to car dealership business, if your garage has various brands of new and used cars from different manufacturing brands and is centrally positioned, you will always attract customers that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in and around Mumbai – Maharashtra and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow the business and our clientele base.

We have been able to critically examine the car dealership industry in India, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Mumbai – India.

• First Fiscal Year: INRs. 8 Million
• Second Fiscal Year: INRs. 18 Million
• Third Fiscal Year: INRs. 26 Million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within our market space. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Raj Ravi Khan® Car Dealership, Inc. we conducted thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for people and organizations in and around Mumbai – Maharashtra and every location where we intend opening our outlets.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the car dealership industry in India to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Mumbai – Maharashtra, India.

In summary, Raj Ravi Khan® Car Dealership, Inc. will adopt the following sales and marketing approach to win customers over;

• Open our car dealership garage in a grand style with a party for all to attract people who live around our car dealership garage
• Introduce our car dealership garage by sending introductory letters alongside our brochure to households, corporate organizations, businesses and other key stakeholders in and around Mumbai – Maharashtra
• Ensure that we have a wide range of both brand new and used cars from different brands at all times.
• Make use of attractive hand bills to create awareness and also to give direction to our garage
• Position our signage/flexi banners at strategic places around Mumbai – Maharashtra, India
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage in roadshows within our neighborhood to create awareness for our car garage
• List our business and products on yellow pages’ ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

In spite of the fact that our car dealership garage is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our car dealership garage. Raj Ravi Khan® Car Dealership, Inc. has a long-term plan of opening our car garages in various locations all around key cities in India which is why we will deliberately build our brand to be well accepted in Mumbai – Maharashtra before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Raj Ravi Khan® Car Dealership, Inc.;

• Place adverts on community based auto newspapers, radio and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote our business.
• Ensure that our we position our banners and billboards in strategic positions all around Mumbai – Maharashtra
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Advertise our cars dealership business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

We are aware of the pricing trend in the car dealership industry which is why we have decided to build robust business relationship with car manufacturers in India so as to enable us get cars at good prices and also sell at good prices.

In view of that, our prices will conform to what is obtainable in the industry but will ensure that within the first 6 to 12 months our cars are sold a little bit below the average price of various car brands in India. We have put in place business strategies that will help us run on low profit for a period of 6 months; it is a way of encouraging people to buy into our car dealership brand.

We know we don’t have the capacity to compete with big players in the car dealership industry but we will ensure that the prices and quality of all the cars that are available in our garage are competitive with what is obtainable amongst car garages within our level.

• Payment Options

The payment policy adopted by Raj Ravi Khan® Car Dealership, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of India.

Here are the payment options that Raj Ravi Khan® Car Dealership, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for our cars without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our cars.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget on achieving our aim of establishing a standard and highly competitive car dealership business in Mumbai – Maharashtra, India and here are the key areas where we will spend our startup capital;

• The total fee for registering the business in India – INRs. 9,200
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – INRs. 15,700.
• Marketing promotion expenses for the grand opening of Raj Ravi Khan® Car Dealership, Inc. in the amount of INRs. 13,000 and as well as flyer printing (2,000 flyers at INRs. 1.00 per copy) for the total amount of INRs. 8,980.
• The cost for hiring business consultant – INRs. 4,000
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – INRs. 15,000
• The cost for payment of rent for 12 months at INRs. 6.00 per square feet in the total amount of INRs. 200,000
• The cost for garage remodeling – INRs. 50,000.
• Other start-up expenses including stationery (INRs. 3,000) and phone and utility deposits ( INRs. 11,000 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – INRs. 260,000
• The cost for start-up inventory (stocking with a wide range of brand new and used cars from different manufacturing brands) – INRs. 12 Million
• The cost for store equipment (cash register, security, ventilation, signage) – INRs. 23,750
• The cost of purchase and installation of CCTVs: INRs. 10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): INRs. 50,000.
• The cost of launching a website: INRs. 7,000
• The cost for our opening party: INRs. 29,000
• Miscellaneous: INRs. 10,000

We would need an estimate of INRs. 12.5 million to successfully set up our standard car dealership garage in Mumbai – India.

Generating Startup Capital for Raj Ravi Khan® Car Dealership, Inc.

Raj Ravi Khan® Car Dealership, Inc. is a private registered business that is solely owned and financed by Raj Ravi Khan and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from the bank

N.B: We have been able to generate about INRs. 2.5 million (Personal savings INRs. 2 million and soft loan from family members INRs. 500,000 ) and we are at the final stages of obtaining a loan facility of INRs. 10 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Raj Ravi Khan® Car Dealership, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our wide range of cars a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Raj Ravi Khan® Car Dealership, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the garage: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party planning: In Progress
• Compilation of list of cars available in our garage: Car Dealership Business Plan
• Establishing business relationships with manufacturers of cars in India and abroad, used car auction houses in India and abroad and other car dealership garages in and around Mumbai – Maharashtra, India: In Progress

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Table of Content

Importance of dealership businesses in india, benefits and challenges of becoming a dealer, best dealership business ideas in india, how can a business loan help to become a dealer, how to apply for business loans, to conclude, frequently asked questions about dealership business.

A dealership business in India can be a rewarding venture for aspiring entrepreneurs. With a diverse and growing market, dealerships play a crucial role in connecting manufacturers with customers across various industries. This blog provides a step-by-step guide on how to become a dealer and importance of a dealership business in India.

The following are the dealership businesses in India:

• Employment Generation

Dealership businesses play a significant role in creating employment opportunities across the country. They provide jobs not only in sales but also in service centres, logistics, administration, and other support functions.

• Distribution and Market Reach

Dealerships act as a crucial link between manufacturers and consumers, facilitating the distribution of products to various regions. They ensure products are readily available, provide localised support, and enhance the market reach of manufacturers.

• Product and Brand Awareness

Dealerships contribute to building product and brand awareness among consumers. Through marketing and promotional activities, they showcase product features, and benefits, and educate customers about the brand, creating a positive impression.

• After-Sales Service and Support

Dealerships play a vital role in providing after-sales service, warranty support, and maintenance for products. They ensure customer satisfaction, build trust, and enhance the overall ownership experience.

• Understanding the Dealership Business Model

To embark on a successful dealership business, it is essential to grasp the intricacies of the dealership business model. This model typically involves partnering with a manufacturer or brand to sell their products directly to customers. As a dealer, you act as a link between the manufacturer and the end consumer, responsible for marketing, sales, and service operations.

• Researching and Selecting the Right Industry

Before diving into the dealership business, thorough research is vital to identify the right industry or sector. Assessing market trends, customer preferences, and the competitive landscape can help you make informed decisions. Consider factors such as demand, growth potential, profitability, and the reputation of the brand you wish to associate with. Conducting market surveys, analysing market reports, and consulting industry experts can aid in selecting the right industry for your dealership business.

• Understanding Legal and Financial Aspects

Establishing a dealership business involves complying with various legal and financial aspects. Firstly, you need to register your business entity, such as a sole proprietorship, partnership, or private limited company, with the appropriate authorities. It is crucial to obtain the necessary licences and permits, including the dealership agreement with the manufacturer. It is advisable to create a detailed business plan and explore financing options such as Business Loan , which can provide the necessary funds to kick-start your dealership business.

ALSO READ :- How to Use Your First Business Loan Effectively?

The pros of becoming a dealer are as follows:

• Profit Potential

Dealers can earn profits by purchasing goods from manufacturers and supplying them to retailers, capitalising on the low investment requirements and potential product demand.

• Brand Association

Exclusive dealership of preferred brands allows for established brand associations, potentially offering additional margins.

• Business Operation Flexibility

Dealers enjoy flexibility as they are not involved in the production and manufacturing processes. Purchasing finished products provides convenience in business operations. The cons of becoming a dealer are as follows:

• Initial Investment

While the initial investment for a dealership is not substantial, funds are still required for hiring staff, setting up an office, and paying manufacturers before receiving payments from retailers or corporate customers.

• Market Competition 

Increased competition in the market, fueled by the low investment and high-profit margin nature of dealerships, requires maintaining competitive quotes to attract and retain business.

• Inventory Management

Dealers need to balance demand and supply, staying in touch with retailers to monitor market trends and inform manufacturers about upcoming demand. This involves effective inventory management.

Here is a list of the best dealership business ideas in India:

• Computer hardware and accessories
• Automobile 
• Organic Food
• Arts and crafts
• Sports equipment
• Furniture and interior decor items
• Plastic items

To become a dealer in India, you require an initial investment for various expenses like staffing, marketing, inventory management, office setup, market research, and addressing working capital needs.  A Business Loan offers a solution by covering these expenses without usage restrictions, allowing you to focus on becoming a dealer without financial concerns. Poonawalla Fincorp provides you with a Business Loan at competitive interest rates , offering loan amounts up to Rs. 50 Lakh and flexible repayment tenures extending up to 48 months.

Follow the steps to apply for a Business Loan with Poonawalla Fincorp to start your dealership business

• Step 1: Click on ‘Apply Now’ and open the application form.
• Step 2: Provide your contact information and other required details in the form.
• Step 3: Upload the necessary documents and click on the ‘Submit’ button.

A dealership business in India requires careful planning, industry knowledge, and financial support. Poonawalla Fincorp, a trusted financial institution, offers business loans tailored to meet the specific requirements of entrepreneurs like you. Whether you need capital for infrastructure, inventory, or working capital , Poonawalla Fincorp can provide the necessary financial assistance to fuel the growth of your dealership business.

1.    Which dealership is most profitable in India? The profitability of a dealership in India can vary depending on several factors, such as the industry, location, brand, and market demand. Generally, automobile dealerships tend to be highly profitable due to the consistent demand for vehicles.

2.    Which distributorship is best in India? Determining the best distributorship in India depends on your interests, market dynamics, and personal goals. There are various sectors with promising distributorship opportunities, such as FMCG (Fast-Moving Consumer Goods), pharmaceuticals, electronics, and food and beverages.

3.    Which is better a franchise or a dealership? The choice between a franchise and a dealership depends on several factors, including the industry, investment capabilities, and personal preferences.

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp. *Terms and Conditions apply

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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Tata Capital > Blog > Loan for Business > How To Start A Dealership Business In India & How To Become A Dealer?

How to start a dealership business in india & how to become a dealer.

The plethora of government initiatives in the last few years has seen dealerships growing in leaps and bounds in India. Usually considered a challenging space to make a mark for new entrants, dealerships today are among the easiest initiatives for individuals and groups alike. Are you interested in starting a dealership business in India? If so, this blog is for you! 

In this article, we'll outline the steps necessary to start and run a dealership business in India and provide insights on how to become a dealer. So whether you're considering expanding your business into unfamiliar territory or are already planning to open up a dealership, read on to learn more!

An introduction to the dealership business

The items you see at your local market or get delivered online usually reach you via suppliers and distributors. Other than some D2C brands, India follows a hierarchy system for most businesses which involves multiple points of contact between a manufacturer and an end customer. 

These products pass the supply chain, where the manufacturer sends the products to a supplier, also known as a dealer. These dealers pass on the goods received to the distributors, responsible for sending them to the retailers and ultimately to the consumers. 

Anyone can open a dealership and sell any product they are authorized to deal in. 

Steps to start a dealership business

If you're thinking of starting a dealership business in India, here are some essential steps that you need to follow -

Make a business strategy for your dealership

It is crucial to develop a business strategy for your dealership if you want it to be successful. First, it is necessary to identify the goals to achieve. Once that's done, work out a plan of action based on your research and understanding of the local market conditions. Many types of businesses and products are available in today's marketplace - so make sure that the type of dealership you choose sticks out from the rest! 

And don't forget about profitability! A well-run dealership shouldn't just focus on making money; it should also enjoy its sense of purpose and contribute positively to society.

Dealership Agreement

When starting a dealership, it is essential to have an agreement in place between you and the business owner. This document sets out the terms and conditions under which you will operate your business. 

Some of the most important things to include are: - 

• The dealership name and location 
• The products and services offered
• The compensation scheme for sales personnel
• Dealer perks such as training facilities or discount schemes 

Ensure all these details are spelled out before signing on the dotted line! Once everything is agreed upon, create a basic business plan outlining how you envisage running your dealership. 

Ensure all licenses and permits required by law are in place before moving forward. Finally, initiate the recruitment process and get started!

Determine your supplier

Before getting started, it is vital to have a clear idea of what you want and where your dealership is headed. You also need the right team of suppliers in place, all of whom should be well-versed with the latest laws and regulations related to the industry.

A pro tip - connect with local suppliers to reduce delivery issues and maintain the margins. 

Build the business

When starting a dealership business, it is important to have a well-thought-out plan. It will include developing a business plan and preparing financial estimates. Once you have those pieces of the puzzle in place, it's time to advertise your dealership and build relationships with potential customers. 

The first step might be identifying your target market - this will help you figure out areas that deserve more attention and focus marketing efforts towards them.

Do not forget to track results and measure the success of your campaigns so that you can continue improving upon what works best for your dealership.

Contact a Franchisor

If it is too difficult for you to start a business, you can take the franchise route, where you opt to manage a franchise of an existing, reputable brand.

There are a few things you need to do before approaching a franchisor:

• Ensure your dealership is up-to-date and you understand the latest trends and technology.
• Have an effective business plan.
• Be aware of the various regulations that apply. 

After the groundwork has been done, it's time to find a reputable and qualified franchisee who will help turn your dream into reality. 

Do some research beforehand so you know which franchises are best suited for your business profile and location. Then, once you've found someone good, approach them!

Create a Powerful Network

Trade shows and events are a great way to connect with other dealers in your industry and get leads for your business. By networking with others, you can find out what new products or services are available on the market and potential partners or distributors. 

Use social media platforms, like LinkedIn and Facebook, to stay connected with other dealers in your industry. It is vital to track down older dealership websites archived, so you don't miss any opportunities. For this, you can connect with experienced professionals or look for what your competition is up to.

Establish a Purchase Policy

It is important to have a clear purchase policy in place, so customers know what they are getting and that the dealer is confident in selling the product. It should be unambiguous and easy to follow and should have clear payment terms, rejection terms, and more.

Dealers must also ensure their inventory matches customer demand, avoiding any disputes or misunderstandings down the line. A well-defined purchase policy will help dealers establish trust with potential buyers and create positive relationships. It would result in increased sales for both parties!

Keep an eye on how your company is doing

It is important to keep an eye on the health of your business. By taking the time to track various indicators, you can identify any problems and take corrective measures before they become big issues. These indicators include operating inventory turnover rate, COGS (cost of goods sold, payroll churn, and more.

How to Become a Dealer in India?

Starting and running a dealership business in India can be a lucrative and challenging venture. However, it's possible if you're determined and have the right skills and resources. 

The first step is to be persistent and work hard at building your business. You'll need to have a saleable product, excellent customer service, and an efficient marketing strategy. 

Make sure you have a solid business plan and are well organized, as dealerships in India are complex and require a lot of up-front work. 

Do not let financing be a roadblock. Contact Tata Capital Business Loans Today

In this blog, we have covered everything you need to know about starting and running a dealership business in India. From the basics of starting a business to the intricacies of becoming a dealer, we have covered it all. 

So what are you waiting for? Start your business journey today and become a successful dealership owner in India! You can get in touch with Tata Capital Business Loans to help get the requisite funds to start your dealership business ASAP.

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Building a Profitable Car Dealership Business from Scratch: A Step-by-Step Guide

• November 16, 2023
• Automotive Lead Generation

If you are passionate about cars and have a strong entrepreneurial spirit, starting your own car dealership business can be an exciting and lucrative venture. However, building a profitable car dealership business from scratch requires careful planning, market understanding , and a solid financial foundation. In this step-by-step guide, we will explore the key aspects of starting a car dealership business and provide valuable insights to help you succeed.

Understanding the Car Dealership Business

Starting a car dealership business requires a comprehensive understanding of the industry and its dynamics. The car dealership industry involves the buying and selling of new and used vehicles to consumers or other businesses. It encompasses various segments, such as passenger cars, commercial vehicles, and luxury automobiles.

As a car dealer, your primary goal is to acquire vehicles at wholesale prices and sell them at a profit. However, this is just the tip of the iceberg. To succeed in this competitive market, you will need to establish strong relationships with suppliers, manage your inventory effectively, negotiate prices, and provide exceptional customer service .

Let’s delve deeper into the key aspects of the car dealership business.

The Basics of the Car Dealership Industry

The car dealership industry is a complex and multifaceted sector that requires a deep understanding of market trends and consumer preferences. It is essential to keep up with the latest developments and technological advancements in the automotive industry to stay ahead of the competition.

When it comes to the types of vehicles you can sell, the possibilities are vast. From compact cars to SUVs, from electric vehicles to hybrid models, the choices are endless. Understanding the different vehicle segments and their unique characteristics will help you cater to a wide range of customer preferences.

Moreover, the car dealership business is not limited to just selling vehicles. Many dealerships offer additional services such as maintenance and repairs, financing options, and extended warranties. These value-added services can significantly enhance customer satisfaction and loyalty.

Key Players in the Car Dealership Market

To navigate the car dealership market successfully, it is crucial to be aware of the key players in the industry. Understanding their roles and characteristics will help you identify opportunities and develop a competitive edge.

Franchise Dealerships are one of the major players in the market. These dealerships have exclusive rights to sell new vehicles from a specific brand or manufacturer. They often offer additional services like maintenance and repairs, making them a one-stop-shop for customers.

Independent Dealerships, on the other hand, are not affiliated with any particular brand. They typically specialize in selling used vehicles and have more flexibility in terms of inventory selection and pricing. This flexibility allows them to cater to a broader range of customer budgets and preferences.

In recent years, online car marketplaces have gained significant popularity. These platforms connect buyers and sellers, facilitating transactions and providing extensive vehicle listings. Online car marketplaces offer convenience and a vast selection of vehicles, making them a preferred choice for many customers.

By understanding the strengths and weaknesses of these key players, you can position your dealership strategically and differentiate yourself from the competition.

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Profitability Factors in the Car Dealership Business

While the car dealership business can be profitable, several factors contribute to your success. It is essential to consider these factors and implement effective strategies to maximize profitability .

Market Demand plays a crucial role in determining the success of your dealership. Assess the demand for vehicles in your target market. Are there specific vehicle types or brands that are highly sought after? Understanding market trends and consumer preferences will help you make informed decisions regarding your inventory selection.

Location is another critical factor. Choose a strategic location that ensures visibility, accessibility, and proximity to potential customers. A well-chosen location can significantly impact foot traffic and customer reach.

Pricing Strategy is a delicate balance. Set competitive prices that attract buyers while still allowing for a reasonable profit margin. Conduct market research and analyze your competitors’ pricing strategies to determine the optimal pricing for your vehicles.

Effective Inventory Management is essential to minimize holding costs and maximize turnover rate. Keep track of your inventory, analyze sales data, and adjust your purchasing decisions accordingly. Maintaining a diverse inventory that caters to different customer preferences can also help attract a wider customer base.

Customer Experience is a key differentiator in the car dealership business. Provide exceptional customer service and build long-term relationships with buyers. A satisfied customer is more likely to become a repeat customer and refer your dealership to others.

By considering these factors and implementing effective strategies, you can increase the profitability of your car dealership business. Remember, success in this industry requires continuous adaptation to changing market dynamics and a relentless focus on customer satisfaction.

Planning Your Car Dealership Business

Identifying your target market.

It is essential to identify your target market before launching your car dealership business. Consider factors such as demographics, income levels, preferences, and local competition. By understanding your target market’s needs and preferences, you can tailor your inventory and marketing efforts to attract the right customers.

Moreover, conducting market research will help you identify trends, predict demand, and adjust your business strategy accordingly.

Choosing the Right Location

The location of your car dealership can significantly impact your success. Look for areas with high foot traffic, easy access, and visibility. Consider the proximity to major roads, commercial hubs, and residential neighborhoods.

Additionally, check local zoning laws and regulations to ensure that your chosen location allows for car dealership activities. Consult with a real estate professional to find the best-fit location for your business.

Deciding on New or Used Cars

Another critical decision is whether to focus on selling new or used cars . Both options have their advantages, and your choice will depend on factors like market demand, available resources, and competition in your area.

Selling new cars might require establishing partnerships with specific manufacturers, meeting certain sales quotas, and complying with brand guidelines. On the other hand, selling used cars allows for more flexibility in terms of pricing, selection, and sourcing.

Legal Considerations for Car Dealerships

Necessary licenses and permits.

Before opening your car dealership, you must obtain the necessary licenses and permits to operate legally. Consult with your local licensing agency or business regulatory authority to identify the specific requirements for your area.

Common licenses and permits typically include a dealer license, salesperson license, and potentially additional permits for vehicle storage, display, and vehicle registration.

Understanding Zoning Laws

Car dealerships are subject to zoning laws, which regulate the types of activities that can take place in specific areas. Ensure that your chosen location is zoned for car dealership activities or obtain the necessary permits or variances.

Consult with a legal professional or local zoning authorities to navigate the zoning regulations and avoid any potential issues.

Insurance Requirements for Car Dealerships

Obtaining comprehensive insurance coverage is crucial to protect your car dealership business from potential risks and liabilities. Insurance requirements may vary depending on your location and the type of vehicles you sell.

Common insurance policies for car dealerships include general liability insurance, inventory insurance, garage liability insurance, and workers’ compensation insurance. Consult with an insurance professional to design an insurance package that suits your specific needs.

Financing Your Car Dealership Business

Startup costs for a car dealership.

Starting a car dealership requires a significant upfront investment to cover various expenses. These may include:

• Property or lease costs for your dealership location.
• Initial inventory purchase.
• Licensing and permit fees.
• Office equipment, furniture, and signage.
• Marketing and advertising expenses.
• Insurance premiums.

Ensure you have a detailed business plan and secure adequate funding to cover these startup costs and sustain your business until it becomes profitable.

Securing Financing for Your Business

If you don’t have the necessary capital to finance your car dealership business, securing financing options can be a viable solution. Explore traditional banking options, government-backed loans, or private investors who specialize in financing car dealership startups.

Prepare a comprehensive business plan, financial projections, and supporting documents to increase your chances of obtaining financing. Demonstrate your knowledge of the industry, market analysis, and strategies for profitability to instill confidence in potential lenders or investors.

Managing Cash Flow in the Car Dealership Business

Effective cash flow management is vital in the car dealership business to ensure ongoing operations and sustained growth. Some key practices include:

• Implementing a robust accounting system to track revenue, expenses, and inventory.
• Regularly reviewing financial statements to identify trends, bottlenecks, and areas for improvement.
• Establishing relationships with reliable suppliers and negotiating favorable terms.
• Minimizing holding costs by optimizing inventory turnover.
• Being diligent with expenses and prioritizing cost control measures.

By continuously monitoring and managing your cash flow, you can navigate potential challenges and position your car dealership for long-term profitability.

Starting a profitable car dealership business from scratch requires careful planning, market understanding, and financial preparedness. By following this step-by-step guide, you can make informed decisions, overcome challenges, and build a successful car dealership enterprise. Remember to continuously adapt to market trends, provide exceptional customer service, and prioritize profitability to thrive in the competitive car dealership industry.

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How to Become a Dealer and Start a Dealership Business in India?

• 05 September 2023
•  Hero FinCorp Team
• 2023-09-05 00:00:00

Table of Contents

Starting a dealership business is one of India's most lucrative and easiest business ideas. It involves distributing or selling particular products in a specific area. As a dealer, you will purchase goods directly from manufacturers and sell them to your customers or clients with a profit margin. You can establish your business with minimal investment with adequate planning and strategies. The best part about running a dealership is that you don't need a hefty investment to purchase or stock inventory in a warehouse. 

Are you planning to become a dealer in India? Look no further! Here, you will find an outline of starting a business in a dealership!

Understanding the Dealership Business Model

Before you become a dealer, understand that each item available in the market usually reaches its customers via distributors and suppliers. India has a hierarchy system involving various contact points between manufacturers and end customers. Each product passes the supply chain, where manufacturers send products to dealers. Dealers pass them on to distributors who ship the products to retailers, where they ultimately reach the customers.

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Steps to become a dealer and start a dealership.

Have you made up your mind to start a dealership in India? Here is how to get a dealership:

Step 1: Identify the Industry and Product

Select the product or industry you want to deal in, be it electronics, automobiles, pharmaceuticals, consumer goods, etc. 

Step 2: Conduct Market Research

Identify the market demand, target audience, competition, and potential suppliers to determine your business viability and success potential. 

Step 3: Select the Right Manufacturer

Select reputable manufacturers with good quality products, favourable collaboration terms, and great after-sales support.

Step 4: Business Registration and Legal Compliance

Follow your local or industrial regulations to register your dealership, including obtaining the necessary permits, licenses, and certifications for business operations. These include trade licenses, GST registration, industry-related approvals, etc. 

Step 5: Arrange Capital and Financing

Assess your business’s initial investment, inventory, infrastructure, and working capital needs to arrange the required money from sources like your savings or a Business Loan.

Step 6: Secure a Suitable Location

Choose a strategic location considering factors like visibility, accessibility, infrastructure needs, proximity to the target market, etc.

Step 7: Build a Strong Team

Hire skilled staff to manage your business operations, sales, administration, customer service, etc. Train them properly to ensure professional customer experiences.

Benefits and Challenges of Becoming a Dealer

A dealership is a highly lucrative business with minimal initial investment. However, you must know the benefits and challenges involved to succeed. 

Advantages of Being a Dealer

Profit potential.

As a dealer, you will purchase goods from manufacturers and supply them to retailers while keeping a profit margin in between. Given its low investment requirements and potential product demand, the dealership business holds significant profit potential.

Established Brand Association

If you plan to deal in branded products, you can establish brand associations by becoming an exclusive dealer of a preferred brand and get additional margins.

Flexibility in Business Operations

Being a dealer, you purchase finished products from manufacturers and sell them to retailers. You are not involved in the production, quality check, and other manufacturing procedures. So, you have the flexibility of conducting the business at your convenience hours.

Challenges Faced by Dealers

Initial investment.

Although the initial investment is not hefty for a dealership business, you still need some investment for hiring staff, setting up an office, and paying the manufacturer before you receive money from the retailer or corporate customers.

Market Competition

Since a dealership is an easy business with minimal investment and a high-profit margin, there is increased competition in the market offering better deals to the retailers. So, you must keep your quotes competitive to gain business.

Inventory Management

While running a dealership business, you must keep a balance between demand and supply. You must stay in touch with retailers to monitor market demand and inform manufacturers about upcoming demand and trends. 

Requirements in Dealership Agreement

To start a dealership, you must have an agreement with the business owner. Called a dealership agreement, it is a document that details the terms and conditions for business operation. Some of the requirements it must include are:

• Dealership name and location
• Products and services offered
• Compensation scheme for the salespeople 
• Dealer perks like discount schemes and training facilities

Spell out and confirm all these details before signing the agreement. Once the document is ready, create a business plan to outline the dealership's business model. Moreover, bring all permits and licenses in place before starting the dealership. Finally, recruit skilled staff and get started!

Keep an Eye on How Your Company is Doing

Create a network and maintain contact with your buyers and wholesalers as far as possible. Keeping an eye on the company's performance will help retain the parties and support business growth. Dealership business ideas are in high demand and profitable without a hefty initial investment. If you need financial support to start a dealership, you can get a small Business Loan from Hero FinCorp and start your dealership business. However, to be eligible for an unsecured Business Loan , you should have a minimum experience of up to five years in a similar field. 

How Can a Business Loan Help to Become a Dealer?

You will need some initial investment to become a dealer in India. Common expenses include hiring staff, marketing, inventory management, setting up an office, market research, meeting working capital needs, etc. A Business Loan can cover the associated expenses without any usage restrictions, helping you become a dealer without worrying about finances. Hero FinCorp offers unsecured Business Loans of up to Rs 40 lakh at competitive interest rates and flexible repayment tenures of up to 60 months.

Also Read:   What are the different types of Business Loans available in India?

How to Apply for a Business Loan Online at Hero FinCorp?

Are you planning to apply for Business Loan to start or expand your dealership business? These are the steps to follow:

• Visit the Hero FinCorp website or download the loan app.
• Go to the Business Loan section and click ‘Apply Now’.
• Fill out an online application form with all the details and documents.
• Enter your loan details like the loan amount, repayment tenure, etc.
• Receive a reference number that you can use for future reference.
• Talk to a customer representative and provide additional details as required.
• Accept the loan offer to get disbursal directly into your bank account.

Read Also:  How to Start a Startup in India?

Understanding how to get a dealership and keeping an eye on details is crucial to establishing a profitable dealership business. Although you don't need a large investment to become a dealer, you can apply for a Business Loan from Hero FinCorp to cover the costs and meet your working capital needs. So, wait no longer and grab this opportunity to take your dealership to the next level without worrying about finance.

Frequently Asked Questions

1. How do I become a successful dealership?

Doing market research, setting sales goals, identifying the products with high supply and demand, marketing the business, and monitoring sales performance are the best strategies to become a successful dealership.

2. Who is bigger distributor or dealer?

Distributors are bigger as they serve larger areas. A single distributor may sell products to several local dealers in an area.

3. How many types of dealers are there?

There are two types of dealers: direct and indirect. Direct or authorised dealers source products from the manufacturers and sell them directly to end consumers. Indirect dealers deliver them to retailers, who finally sell them to end consumers.

4. Who gets paid the most in a dealership?

The payment model in a dealership varies depending on the industry, market demand, location, brand, etc. Usually, car dealerships are highly profitable due to consistent vehicle demand.

5. What is the difference between a dealership and a distributorship?

Distributors sell products within a particular territory or region with exclusive rights. Dealers purchase products from distributors and sell them to end customers.

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Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.

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Public Notice: Moratorium Message

Dated: march 31, 2020.

Dear Customers,

Today, the entire world is facing a crisis in the form of Covid-19, and it is during these times that we all need to come together to support each other and to act responsibly.

In light of the recent nationwide lockdown, we at Hero FinCorp are providing a three months moratorium to our loan customers as per eligibility and guidelines issued by RBI. This moratorium facility is only applicable for EMIs due between March 01, 2020 and August 31, 2020. EMIs / over dues prior to March 01, 2020 are not eligible for moratorium.

Please note, if you opt for the moratorium, interest will continue to accrue for the duration of the moratorium period at the currently running interest rate on your loan. This additional interest will be collected from you by extending the original tenor of your loan. We will also share an updated loan repayment schedule which would include all relevant details.

We urge customers to use this option only if absolutely necessary. This facility has been especially designed for those customers whose cash flows have been severely affected and they do not have sufficient savings or other income sources which they could use for paying their EMIs. The downsides of opting for the moratorium include:

• 1. Higher interest costs
• 2. Longer loan tenor
• 3. You pay more overall

If you can, then you must continue to pay EMIs as per your existing Repayment Schedule. This would be a far superior option in the long run as it offers several benefits, it is easier, simpler, and cheaper to do, so choose wisely!

To apply for moratorium, please send us a request from your Registered Email Address, along with your Loan Account Number and Registered Mobile Number. Post which we shall initiate the moratorium for unpaid EMI of March 2020 (if any), and for EMI of April and May 2020.

For moratorium request or any other information, please write to us at:

Retail Finance Customers:

Corporate Finance Customers:

Best Wishes, Team Hero FinCorp

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Public Notice: Update on Hero FinCorp’s operations during COVID-19

Dated: march 26, 2020.

At Hero FinCorp, health and safety of all our employees, customers, and stakeholders is a top priority. In the wake of the Corona virus (COVID-19) outbreak, we are strictly adhering to guidelines from the government and other concerned authorities, in order to contain the spread of the virus and minimize impact on business.

During this challenging time, we have taken several measures to ensure safety of our employees, this includes providing work from home option for all our workforce and keeping a regular check on their and their family’s well-being. We have shut–down our offices and introduced alternate ways of working through Digital modes to ensure safety and business continuity. We are also working with our vendors and partners to ensure compliant and robust BCP plans are operationalized at their end as well.

Given the 21 day nation-wide lockdown announced by the honorable Prime Minister of India on March 24, 2020, we have put in place various initiatives to ensure that there is zero disruption in critical operational processes. Accordingly we are ensuring regular and relevant communication goes out to all our stakeholders and investors on the status of our operations.

While we remain committed to providing high levels of service to our customers, given the circumstances, we urge our customers to co-operate with us by ensuring the following:

• 1. Choose E-mail channel for any loan servicing related request - This is a channel that has been strengthened to ensure quick resolutions to issues raised. While our call center remains operational, customers might encounter longer wait times, as they are operating at a reduced capacity to accommodate work-from-home policy.
• 2. Ensure timely payments of EMIs through digital channels – We urge our customers to remain disciplined towards their EMI re-payments. We have made available numerous digital modes of payments on our official website (www.HeroFinCorp.com), and encourage our Retail customers to pay their dues by leveraging the same.

This is an unprecedented situation, and we at Hero FinCorp remain fully focused on overcoming the common crisis that we face. We are confident that with a little faith and discipline we shall soon see this situation through and normal business operations shall resume.

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Best Dealership Business Ideas in India [Top Dealership Opportunities]

The dealership business has evolved tremendously over the past few years. Most retailers and small business owners obtain certain dealerships and start a business. A business is considered a dealership when the owner of a brand allows an individual or company to sell a certain product. There are various options for a dealership business that you can choose from according to your preferences.

Dealership business ideas are less risky compared to other businesses. You can start this business with a minimal amount of capital. Let us look at some of the dealership business ideas that you can implement.

Dealership Business Ideas

Which dealership is most profitable in India is a common question that comes in the mind when you're starting a dealership business. Some of the small business ideas for dealership are as follows:

1. Automobile business

A primary business idea you can consider is an automobile dealership business. You can deal in car parts, bike accessories, and other related items. You need a good knowledge of retail parts and car accessories. It is one of the unique business ideas if you are a car or bike lover. Vehicles often need maintenance and repair. So, starting an automobile business is a good business idea. It is a highly profitable business because of the high demand.

2. Food business

The food industry is one of the largest industries in India. Food is always in demand and will continue to be in demand. So, getting a food dealership is highly profitable. You can get a dealership in various food items, like bakery items, dairy products, snacks, beverages, jam, daily grocery items, etc.  Consumers need daily products for their household. So, it is the best business to start in India.

3. Health care and beauty products

You can also start a health care and beauty products dealership business. It is one of those small profitable business ideas that require low investment. You can get a dealership for various beauty and health products, like medicines, cosmetic items, specific brands, personal care items, healthcare items, etc. Purchasing the dealership for famous brands will help you increase the sales and revenues of the business. You can also start a healthcare and beauty products business from home.

4. Jewellery business

The next dealership business idea that you can start is the jewellery business. Jewellery is an essential part of women’s lives in India. A jewellery business is a small scale business that you can start from your home. There are many big brands in jewellery that you can associate with for your business, and you can get a dealership to sell their products.

It is profitable and a popular business idea among young people. However, it requires knowledge and interest to start this business. You need to possess the required knowledge of jewels, purity level, polishing, etc., to understand your jewellery pieces. If you have a knack for creativity and passion, you can start a jewellery dealership business.

5. Organic food business

Large sections of people increasingly prefer organic food items compared to normal inorganic food products. The organic market has immensely grown over the years. So, there is a perfect market opportunity to start an organic food business. There are many companies and brands that sell organic products and food items for sustainable living. You can identify the dealers that have more demand in the market and sell their products. It will increase the revenues and the profits of your business.

6. Furniture dealership business

Another lucrative dealership business idea is a furniture business. You can choose the specific furniture items and narrow down the specifications that are in demand. It is one of the new business ideas you can start in India. Several dealership companies allow small business owners to obtain their dealership services. You can select portable, lightweight, multipurpose, and trendy furniture as per customers’ requirements.

How to Get a Dealership?

Let us now discuss the steps required to get a dealership . The basic steps for starting every type of dealership are as follows:

1. Create a dealership business plan

A dealership business plan , as the first step, will help you streamline the next steps for your business. A dealership business plan will help you determine the investment, budget, capital, requirements, financial plan, management and operations plan of your business. The business plan will be different for different types of businesses. Research about the business you want to start and plan accordingly.

2. Identify your dealer

After selecting the business and creating a business plan, the next step is to identify your dealer. It is essential to identify them wisely and check their legal papers to verify the business activities of the dealer. Also, you can check the work permit and licences of the business for security verifications.

3. Dealership contract

The next step is a dealership contract. A dealership contract is a document that states all the conditions and requirements of the business. It states the name of the dealer, restrictions, purpose, etc. A dealership contract is made keeping in mind the type of business. It helps a buyer to understand the business restrictions, process and guidelines. After reading the contract, both parties sign the agreement. It allows small business owners and entrepreneurs to officially and legally sell the brand’s products.

4. Start the business

After signing the contract, a small business owner can start the dealership business. The owner can sell the products online or offline as per their requirements and preferences. You can use social media platforms for advertisements and the promotion of the business. It will help you grow your business faster.

Thus, we can say that dealership businesses are profitable and high in demand. Among the best business ideas, a dealership business can be launched with less effort, rather than starting a new business from scratch. There are several options for dealership business ideas that you can choose from, such as furniture dealership business, clothing business , textile business, health care and beauty products business, etc. if you are looking to start a dealership business, read the steps required, as mentioned in the article, to obtain a dealership.

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Q. How much money is required to start a car dealership in India?

Ans. The funds required to start a car dealership varies based on the brand. The minimal cost ranges from INR 10 lakhs to INR 20 lakhs. However, the investment cost can go up to INR 50 lakhs. If you are selecting high-end brands, the cost will be much higher compared to average brands. High-end brands can cost up to INR 1 crore or above. Individual car manufacturers charge different prices for different dealership companies.

Q. What documents are required to start a car dealership business?

Ans. The documents required to start a car dealership business are listed as follows:

• Proof of nationality
• School certificates or passport
• Aadhar card number
• Driving license
• Address proof (ration card, electricity bill, rent agreement, property proof, etc.)
• Location details
• Bank information
• Business licenses and certifications

Q. Are dealership businesses profitable?

Ans. Dealership businesses are considered profitable compared to other small businesses. Starting a dealership business expands the business reach and customer base. It also increases the revenues and profits of the business. The demand for branded clothes, cards, IT products, and other branded items is high in the market. This makes it a profitable business idea.

Read the best of business ideas, tips for small businesses, the latest update on technology & more by OkCredit.

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How To Start Dealership Businesses in India [2022]

Starting a dealership business can indeed be profitable. It is also one of the easiest businesses to start, as it involves less capital and overhead expenses. However, note that you can become successful only if you get all the aspects right, including planning and strategy, execution, demand, and capital.

If you want to start a dealership business in India in 2022, you have many options. But you must know before you can begin what a dealership business entails.

What is a Dealership Business?

We all buy products from our local supermarket. These days, we even purchase them online. Products put up at your local supermarkets, or online stores come from a chain of suppliers and distributors. So, the items and products that you see at your local supermarket must go through a series of such suppliers and distributors before they get there.

These suppliers and distributors are known as a supply chain. There are various people involved in this supply chain process, including dealers and distributors.

Both dealers and distributors form an integral part of the supply chain, although there are several differences.

Dealers are people who purchase goods or products from manufacturers and sell them off. In layman’s terms, a dealer is someone who trades a particular product or item. Sometimes, dealers also act as a middleman between the distributor and consumer, although they are different because they can attract consumers.

A dealer can sell any product, including those of the competitors or rivals. That is, a dealer is authorised to sell any brand of their choice.

How to Become a Dealer in India?

Several steps go into starting a successful dealership business in India. Ideally, you should follow these eight steps to create a dealership business .

1. Choose a Product

The first step towards becoming a dealer is to choose the products you want to sell. For this, you must know what products are trending within your neighbourhood. Take some time to get to know your area, its people, their preferences, and buying habits. You could also talk to other local dealers to get an idea about what products you can sell.

2. Rope in Suppliers

Once you have decided on the products that you want to sell, it’s time to connect with the local suppliers who can get them for you. It would be better to contact only a few local suppliers that you can find nearby and keep the margins at bay to save on shipping and testing the products, especially if you are a newbie.

3. Establish a Workplace

The next step towards starting a successful dealership business is to set up a shop, preferably within your neighbourhood. When setting up your dealership establishment, don’t forget to save a place where you can stock your inventory. In the initial stages, you can also do it from home and save money.

4. Find a Franchisor

If starting a dealership business from scratch sounds too hard, you can always own a franchise, in which case, you would not have to establish a shop but rather own and run a franchisee of a big brand.

5. Don’t Forget to Set Up a Credit Policy

One of the nuances of starting a dealership business is to have a robust credit policy. Check for who your buyers are and whether they can buy from you. Also, make sure that you check their credits and accordingly set up your credit policy system.

6. Build a Strong Network

If you want to know how to start a dealership business , one of the best ways would be to connect with other dealers, distributors, and suppliers and form a strong network. Note that networking is one of the most crucial aspects of the dealership business .

7. Have a Purchase Policy

The best way to run a dealership business would be to buy products in bulk, repack them into smaller units, and sell them off at higher prices. That way, you can make good profits.

8. Keep an Eye on How Your Business is Doing

Stay in touch with your retailers as much as possible. It will not only help you retain them but also increase business volumes.

Best Dealership Business Ideas

There are more than 40 small business ideas that you can try. However, you should know that these six areas are the most profitable when it comes to dealerships.

1. Automobile

The automobile sector thrives as most people tend to use their cars or vehicles for a longer time. However, the question begs, how to start a dealership business in the automobile niche? You can always begin by opening a small retail store that sells automobile parts and accessories in addition to offering services like car washing. There are many famous and profitable automobile dealers in the country, including Bajaj, Hero Moto Corporation, MRF Tyres, Maruti Suzuki, BSA Cycles, and more. So, there is no doubt that a dealership business in the automobile niche is profitable.

2. Arts and Crafts

If you are good at making items that involve arts and crafts, you can always start an arts and crafts dealership business . There are many opportunities here, including those in costume and jewellery making, toy making, candle making, and clothing.

3. Computer Hardware and Accessories

If you are a computer geek, then selling computer hardware accessories would be the best business to start in the dealership segment. A dealership business in computer hardware accessories is highly competitive and profitable. As a computer hardware and accessories dealer, you can sell a wide range of devices, including memory cards and USB flash drives, external storage devices, monitors, cables, input devices, and other such accessories.

4. Furniture and Interior

Selling furniture and interior décor items can be one of the best dealership business ideas that you can turn into a substantial profit-making gig. The reason for this is that you get the best profit margins here. As a furniture dealer, you can sell different items, such as those made of wood, bamboo, wrought iron, and cane furniture. You can also sell various interior decoration items as part of your furniture and interior dealership business .

5. Sports Items

As a sports item dealer, you can sell a host of products, including equipment for outdoor and indoor games, entertainment and fishing products, and even musical instruments. However, make sure that you start with only a few categories if you are a beginner.

You can also sell plastic items as part of your dealership venture. Today, plastic and other such items made from polymer are the primary sources of several household items. They also find uses in the packaging industry. So, a dealership business in plastic can indeed be a lucrative and profitable idea.

Final Thoughts

For all those entrepreneurs looking to start a dealership business , you can always try your hand at these popular and new business ideas . It is no doubt one of the best businesses to start , especially in India. Not only can you make profits, but also expand the scale of business as it thrives.

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Q. What dealership businesses are the most profitable in India?

Ans. Owning a franchise of some of the most popular outlets, such as Subway, Jawed Habib and Beauty Limited, DTDC Cargo and Courier Limited, Fab India, and more, can be one of the most profitable dealership business ideas in India.

Q. Which is the cheapest dealership business that you can start in India?

Ans. There are many low-cost, low-investment dealership businesses that you can start in India. For instance, you can own a franchise of Giani’s, Thano’s Natural Ice Cream, Fenusta Global, Bright Kids, Rocking Deals, and more.

Q. How to differentiate between whether the franchisor or franchisee manages an area?

Ans. It is hard to tell whether the manager of a popular outlet is a franchisor or franchisee, as it caters to a large customer base, some of whom may even be residing outside those areas.

Q. Who are term sales agents, and what do they do?

Ans. Term sales agents are representatives that companies appoint to sell their products. The target customers can range from wholesalers and retailers to individuals. They typically get a commission for every product or item they manage to sell.

Q. How many companies can I collaborate with as part of my dealership business?

Ans. How many companies you can tie up with depends on the products you want to sell and the location of your dealership outlet.

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How to Start Used Car Dealership Business In India

Souvik Dey , Atish Ranjan Das

A used car dealership business in India means that selling used cars to customers who are looking to own a vehicle but their savings money does not allow them to buy from ex-showroom price and earn profits. The COVID-19 (Coronavirus Disease) pandemic has placed the automotive industry at great disruption. Starting a user car dealership business in India will be profitable, where cars have to be brought from their owners at a lower price than you will sell later. IBISWorld reports the used car dealership industry has had a net decline over the past five years, due to coronavirus, at an average annual rate of -1.6% . In the upcoming years, this industry's 129,553 businesses are forecast to see $ 99.1 billion in collective revenue. Nowadays people need more cars due to their daily transportation. The globally used car market size was valued at USD 1,332.2 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027.

As there is the rise in the cost of new cars in the market also the increasing rate of interest on car loans has resulted in a shift in consumer preferences from purchasing brand new cars to buying used cars. In this article, we will discuss in brief how you will begin this car dealership business.

Key Segments of Used Car Dealership Industry

• The inability of customers to buy new cars became one of the reasons for the growing sales of used car volume.
• These dealership networks helped market participants to brand and make used car options.
• The added quality and reliability of used cars changed the consumer attitude and increased the sales of the used passenger cars.
• Investing in used car management has become one of the market’s requirements characterized by slimming margin, relentless competition, and demanding consumers.
• High disposable income
• Rising demand for luxury cars
• The shorter period of car ownership
• Increasing preference of the owner of a two-wheeler to upgrade to a compact car

External Factors Affect the Used Car Dealership Industry

Several factors affect the performance of the used car dealership industry:

• Per capita disposable income – When customers have more money to spend, they become more willing to spend on expensive discretionary items, such as used cars.
• Price of new cars – Buying a used car is a more affordable alternative to purchasing a new car.
• Aggressive age of vehicle fleet – As the average age of vehicle fleets increases, it represents greater demand for vehicles.
• World price of crude oil – High gasoline prices tend to decrease new and used vehicle sales.

Used Car Dealership Business Plan

A business plan is a blueprint that is necessary for running any business successfully. When you have a well-defined business plan the scope for trial and error in the actual business scenario. The primary objective of a used car dealership business is 100% customer satisfaction. After that, the business will aim to achieve and exceed the average profit margin within the first two years of business. The main mission must be to provide a hassle-free car buying experience with the main focus on customer satisfaction. After you select your location where you intend to start your business then you have to do work with the facts, indices, and other figures in the industry.

The dealership also provides job satisfaction to its employees by rewarding their efforts with bonuses and incentives. One important thing is to fulfill the buyer’s need for safe and quality transportation by providing them used cars that match or exceed their expectations.

After doing all the necessary objectives you need to bring together a proactive team of professionals who have some experience in the field. The network of suppliers that can help in buying and selling cars of optimum quality at attractive prices.

Used Car Dealership Business Start-Up Cost

The start-up costs of a used car dealership will be financed through short-term loans, owners' investment , and long term loans. The costs depend upon the following factors:

• Stationary and office supplies
• Accounting consultation fees
• Office or plot rent
• Legal fees for a business establishment such as ownership and no sell agreement
• Marketing or advertisement fees
• Web presence and online advertising expenses
• Equipment such as desks, computers, telephone, fax/copier, and office furniture
• Surety bond

Economic Analysis of Used Car Dealership

This new wave of digital retailing represents more than technology alone because it focuses on the importance of the customer experience in the used-car buying process.

Highlights of used car dealership business:

• Complete end to end purchasing capabilities( 59% of buyers)
• Extensive vehicle data and photos along with effective search tools ( 64% of buyers)
• Unique delivery options( 28% of online buyers)

Legal Aspects of Starting Used Car Dealership

Your business goal will decide the legal entity, you must choose for your used car dealership business. When you are starting with a moderate amount of capital, you can choose to be the sole proprietor of your entity.

Some of the legal documents you will need to run a used car dealership business are :

• Business and liability insurance
• Certificate of incorporation
• Tax Payer’s ID
• Fire certificate
• Used Car Dealership License
• Business Plan
• Non-disclosure Agreement
• Employee’s Handbook(optional)
• Facility permit/ license
• Franchise or Trademark License
• Insurance Policy

Choosing Location for Used Car Dealership

A car dealership requires a parking lot where you can park the cars and display them, as well as an indoor office space where all the administration is done. Before you search for a location you will consider the following points:

• Demographics
• Number of existing used car dealerships in the location
• Accessibility
• Local laws of the region or state
• Security, safety, parking space
• The purchasing power of the people residing there

Awareness of Used Car Dealership Business

None of the business is running without promotion and the same goes with the used car dealership business. Uniform promotion efforts are important to get noticed. The way you show yourself people perceive you in that way. Nowadays social media has emerged as the greatest platform for brand promotion and is very effective.

Some ways of brand promotion are as follows:

• Sponsor community programs that are relevant to you
• Give advertisements in newspaper, magazines, radio, and TV stations
• Place hoardings in a target location that will get your business noticed
• Distribute pamphlets
• Some introductory letters in your location introducing people to know about your business
• Take reviews from your initial customers and promote them because this way you will make trust

Looking for Distribution Network for Used Car Dealership Business

Being a member of a good network of used car dealers, you will be able to establish ready links with people who are looking to sell used cars. The Internet is a fantastic platform for advertisement and you must put your best foot forward in gaining leverage from it.

The impact of GST on Used Car Dealership Business

GST or Goods and Services Tax is usually charged on the transaction value of goods. Indian Automobile industry mostly benefited after the implementation of the new tax regime. As per the Goods and Services (GST) Act, a registered dealer buying from an unregistered dealer will be entitled to pay tax under RCM, which simply means the registered dealer would subtract all taxes from the payment made to be the provider.

GST Impact on Buying a Used Car

If you are dealing in the market for a used car and are sifting through used car dealerships, you must have observed that the tax increased to 28 % from 5 % after the implementation of the Goods and Services Tax Regime. Previously, the used car dealers had to pay only 5 % tax value-added tax on the vehicles which are resold. Dealers generally keep their margin in the range of 10% to 20 % . It depends on the several factors of cars such as car type, age, and demand.

GST Impact on Selling a Used Car

If you are thinking to sell a used car, try searching for an organized car dealer nearby you who is offering second-hand vehicles at lower prices as compared to what you would expect for it. Generally, the dealers try to eliminate the tax burden either through the buyer and seller side or both.

The organized sectors and semi-organized sectors which cover approximately 21% of the market account are going to be benefited from the reforms and expected to grow by 36% and 12 % respectively against 17% unorganized sectors. Like dining, shopping, and entertainment, the car buying experience that people prefer is changing. The future of car dealerships is changing. The global used car market is expected to grow at a compound annual growth rate of 5.5% from 2020 to 2027 to reach USD 2,150.6 billion by 2027 . The Asia Pacific dominated the used car market with a share of 35.6% in 2019 , in terms of shipment. This is attributable to emerging economies, including India, which is dominated by unorganized players.

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Car Dealership Business Plan Template

Written by Dave Lavinsky

Car Dealership Business Plan

Over the past 20+ years, we have helped over 4,000 entrepreneurs create business plans to start and grow their car dealerships. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a car dealership business plan template step-by-step so you can create your plan today.

Download our Ultimate Car Dealership Business Plan Template here >

What Is a Car Dealership Business Plan?

A business plan provides a snapshot of your car dealership as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your Car Dealership

If you’re looking to start a car dealership or grow your existing car dealership you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your car dealership in order to improve your chances of success. Your car dealership business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Car Dealership Businesses

With regards to funding, the main sources of funding for a car dealership are personal savings, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a car dealership is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Finish Your Business Plan Today!

Your business plan should include 10 sections as follows:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of car dealership you are operating and the status; for example, are you a startup, do you have a car dealership that you would like to grow, or are you operating a chain of car dealerships.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the car dealership industry. Discuss the type of car dealership you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of car dealership you are operating.

For example, you might operate one of the following types:

• New Car Dealers : this type of car dealership business typically sells both new and used passenger vehicles. Usually, this type of dealership also has a service department and also sells parts.
• Used Car Dealership : this type of car dealership sells used passenger vehicles, including cars, light trucks, sports utility vehicles (SUVs) and passenger vans.
• Online Car Dealership : this type of car dealership retails automobiles online to consumers and businesses and provides services to aid in the purchase of automobiles. Some players offer their customers trade-in, car financing and car selling services.

In addition to explaining the type of car dealership you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new store openings, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the car dealership business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the car dealership industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards vehicles, it would be helpful to ensure your plan calls for plenty of options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your car dealership business plan:

• How big is the car dealership business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your car dealership. You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your car dealership business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: college students, soccer moms, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of car dealership you operate. Clearly baby boomers would want a different atmosphere, pricing and product options, and would respond to different marketing promotions than college students.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most car dealerships primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other car dealerships.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This primarily includes private sellers. You need to mention such competition to show you understand that not everyone in the market for a car shops at a dealership.

With regards to direct competition, you want to detail the other car dealerships with which you compete. Most likely, your direct competitors will be car dealerships located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of automobiles do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to stand outside your competitors’ locations and ask customers as they leave what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior products and/or services?
• Will you provide cars that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your products?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a car dealership business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of car dealership that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to selling new cars, will you offer leasing options?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the inventory you will maintain and the price ranges.

Place : Place refers to the location of your car dealership. Document your location and mention how the location will impact your success. For example, is your car dealership located next to a high-traffic retail area, or on a main thoroughfare, etc. Discuss how your location might provide a steady stream of customers.

Promotions : the final part of your car dealership marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your car dealership extra appealing to attract passing customers
• Pay per click advertising
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Social media advertising
• Local radio advertising
• Banner ads at local venues

Building Trust

Building trust between a car dealer and its customers is vital to a successful sales strategy. This should be clear in the business plan, where funders look to see the feasibility of the company once it’s launched. Earning customer trust is important because of the bad reputation, deserved or not, for car salespeople to try to take advantage of customers and because of the high amount of stress which the purchase of a large item like a car causes for buyers.

Below are the best ways to build trust in your customers.

Referrals and Testimonials

Running a dealership with a heavy focus on satisfied customers referring other potential customers can create positive word-of-mouth between contacts who already know and trust each other. An additional element to this is securing testimonial statements (either written or videotaped) from happy customers. This requires having those happy customers in the first place, as customers can sense if the testimonials are canned and will mistrust even further.

Transparency

If auto dealerships were extremely clear about all pricing, fees, and costs of ownership up front, customers might change their opinion of these companies. However, too often there is a great focus on a low sticker price to attract customers who later on feel they’ve been lied to when all of the add-on charges are explained. Can your dealership change this industry practice and make transparency into a competitive advantage?

Taking Your Time

By taking the sales process at a rate that the customer is comfortable with, you recognize that it is a difficult step for customers to walk into the world of the dealer and play on his home turf, so to speak. They will be feeling defensive and a bit thrown off, so tell them that you will take the time to answer any questions they have and to make sure they understand and have considered their options before moving forward.

Operations Plan

While the earlier sections of your car sales business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your car dealership such as serving customers, completing necessary paperwork, keeping the dealership clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your car dealership’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the car dealership business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in car dealerships and/or successfully running retail and small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 20 customers per week or 75? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your car dealership, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a $1,000,000 fleet order, that would cost you $500,000 to fulfill. Well, in most cases, you would have to pay that $500,000 now for inventory, transportation, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets, be sure to include several of the key costs needed in starting or growing a car dealership:

• Location build-out including design fees, construction, etc.
• Cost of equipment like computer hardware and software, etc.
• Cost of maintaining an adequate amount of supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.

Car Dealership Business Plan Summary

Putting together a business plan for your car dealership is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the car dealership business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful car dealership business.

Download Our Car Dealership Business Plan PDF

You can download our car dealership business plan PDF here . This is a business plan template you can use in PDF format.

Car Dealership Business Plan FAQs

What is the easiest way to complete my car dealership business plan.

Where Can I Download a Car Dealership Business Plan PDF?

You can download our car dealership business plan PDF template here . This is a business plan template you can use in PDF format.

Don’t you wish there was a faster, easier way to finish your Car Dealership business plan?

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How to Start Used Car Dealership Business in India

A used car business in India profits by selling used cars to customers who are looking to own a vehicle but their pocket does not allow them to afford the ex-showroom price. For a used car dealership business to be profitable, cars have to be bought from their owners at a lower price than you mark it up for sale later.

A sharp rise in the cost of new cars in the market and an increasing rate of interest on car loans has resulted in a shift in consumer preferences from purchasing brand new cars to buying used cars. Though they expect to pay out much lesser than the price of a new car, they are only willing to compromise marginally on the safety and performance aspects. Read on if you are looking for used car dealership business ideas.

Used Car Dealership Business Plan 

A business plan is the blueprint that is necessary for running a business successfully. When you have a pre-defined business plan, the scope for trial and error is less in the actual business scenario.

Any business plan starts with the objective and the primary objective of a used car business is 100% customer satisfaction that is indicated by repeat customers and referrals. After that is realized, the business will aim to achieve and exceed the average profit margin within the first two years of business. Depending on the rules that apply to the location where you intend to start your business, work with the facts, indices, and other figures in the industry.

The mission must be to provide a hassle-free car buying experience with an unrelenting focus on customer satisfaction. The aim is to fulfill buyers’ need for safe and quality transportation by providing them used cars that match or exceed their expectations. The dealership must also strive to provide job satisfaction to its employees by rewarding their efforts with bonuses and incentives.

After the objectives and mission are clear, a used car dealership business needs to bring together a proactive team of professionals who have some experience in the field. A high-traffic location is important and so is a network of suppliers that can help in buying and selling cars of optimum quality at attractive prices.

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Used Car Dealership Business Start Up Cost 

The start-up costs of a used car dealership will be financed through short term loans, owner’s investment and long term loans.

At the onset, costs may also include certain miscellaneous items such as :

• Stationery and office supplies
• Marketing or advertising fees
• Legal fees for business establishment such as ownership and no sell agreement
• Accountant consultation fees
• Office or plot rent
• Web presence and online advertising expenses
• Equipment such as desks, computers, telephone, fax/copier, and office furniture

How to start a used car dealership business? 

It is not necessary that a used car dealership will require a huge investment of capital. If you have sound business knowledge and a foolproof business plan to back it up, you can start your business. Promotion skills are essential and it is also important to maintain integrity in the business. Remember to complete all legal formalities before starting the business to steer clear of law related issues in future.

Conduct a market feasibility research of demographics and psychographics. Normally, used cars are a lot in demand. Several surveys over the years have indicated that the numbers of people who can afford brand new cars is much lesser than those who prefer to spend on used cars.

If you are an entrepreneur looking to start a used car dealership business, you can consider one of the following:

• Used luxury cars dealership business
• Online used cars dealership shop
• Physical used car dealers store
• Multi brand car dealers

Online used car stores generally thrive better than physical dealership stores because customers find it easy to review the prices, buyer feedback and models online before making their purchase.

Also Read :  15 Best Business Ideas under 30 Lakhs

Economic Analysis 

When you are looking to start a used car dealership, it becomes necessary to conduct a market survey and a study of business feasibility. If your business intent is to generate profits or to grow the business across locations far and wide, your economic analysis must be accurate.

Legal Aspects of Starting a Used Car Dealership 

Your business goals will decide the legal entity you must choose for your used car dealership business. When you are starting with a moderate amount of capital, you can choose to be the sole proprietor of your entity. If you intend to open more branches in future or even sell used cars across borders, then you must choose to start a limited company or a partnership business.

Some of the legal documents you will need to run a used car dealership business are:

• Business and liability insurance
• Certificate of Incorporation
• Tax Payer’s ID
• Fire certificate
• Used Car Dealership Business License
• Business Plan
• Non – disclosure Agreement
• Employee’s Handbook (optional)
• Facility permit / license
• Franchise or Trademark License
• Insurance Policy

Also Read : 10 Best Car Manufacturers

Choosing a location for your used car dealership 

Before you zero-in on a location for your dealership of used cars, you can consider the following:

• Demographics (as mentioned already)
• Purchasing power of the people residing there
• Number of existing used car dealerships in the location
• Accessibility
• Local laws of the region or state
• Security, safety, parking space

Dealer License 

To start a business it is important to have a dealer’s license. It is this dealer’s license that allows you the legal permit of operating the business of buying and selling of old or used cars. A licensed dealer is usually considered trustworthy and you can safely engage in dealings with him. To obtain the license, the entrepreneur may sometimes be required to undertake a few courses and clear the license exam.

How to create brand awareness for your used car dealership and get it noticed 

No business thrives without promotion and the same holds true for a used car dealership business. Steady promotion efforts are important to get you noticed. People perceive you the way you put yourself across in front of them. So, if you want your target customers to think high of you, you will have to promote yourself like that in the market.

Go for print and electronic media advertising to get eyeballs on your brand. Social media has emerged as an inexpensive platform for brand promotion and is very effective, as well.

Here are some methods of brand promotion in a nut shell:

• Give advertisements on newspaper, magazines, radio and TV stations
• Sponsor community programs that are relevant to you
• Place hoardings in strategic locations that will get your business noticed
• Explore the best of social media platforms
• Distribute pamphlets or introductory letters in your location introducing people to your business
• Seek reviews from your initial customers and promote them because prospects will find reviews trustworthy

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Looking for a Distribution Network for your Used Car Dealership

Being a member of a good network of used car dealers, you will be able to establish ready links with people who are looking to sell used cars. When you place advertisements mentioning your engagement in a business of used cars, you are making your presence felt in the arena. The Internet is a fantastic platform for advertisement and you must put your best foot forward in gaining leverage from it.

You may be running a brick and mortar business of used cars but that cannot stop you from operating online as well and being a member of distinguished networks through which you are most likely to get business.

The impact of GST on Used Car Dealership business 

GST or Goods and Services Tax is usually charged on the transaction value of goods. Since used car is a second hand product, a dealer of such goods can pay tax on the margin, which is the difference between the value at which a car is supplied and the price at which a car is purchased. In case there is no margin, there will not be any GST applicable.

According to Rule 32(5) of the CGST Rules, 2017, if a taxable supply of used goods is provided by a dealer selling second-hand goods after minor touches on them such that they do not impact the nature of those items and where no input tax credit has been availed when purchasing those goods, the tax on them will be calculated on the difference between the selling and purchase price and if the value of this supply is negative, no GST will be charged. Read this CBEC Press Release for more information on GST Rates on Services.

The future looks bright. In the recent years, the used cars dealership market has seen a staggering growth of 22% to 24%, and this statistic probably says it all. The entire world has been witnessing a steep rise in the ratio of used cars sold in comparison to new cars – China (2.2:1), USA (3:1), India (1.3:1) and Germany (3:1).

Used cars are not shunned any more even by those who have their pockets heavy. The used car business is growing and is destined to grow in future, as well. Even from the buyer’s point of view, used cars are budget-friendly and have a lower value of depreciation.

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What is a Dealership Business?

We all shop at our neighbourhood grocery. We can even buy most products online these days. Products sold in supermarkets and online retailers are sourced through a network of suppliers and distributors. As a result, the commodities and products you see at your local supermarket must pass through several such suppliers and distributors before arriving there.

A supply chain is made up of these suppliers and distributors. This supply chain method involves a variety of stakeholders, including dealers and distributors. Although there are certain distinctions, both dealers and distributors play an essential role in the supply chain.

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What are some of the profitable Dealership Business Ideas?

Some of the  best profitable business in India  in respect to  dealership business are:

1. Automobile Dealership Business

An automobile  dealership business is a popular business concept to explore. You may sell car components, bike accessories, and other such things. You must be well-versed in retail parts and automotive accessories. If you enjoy cars or motorcycles, this is one of the most successful business ideas. Vehicles frequently require maintenance and repair. Starting a car business is, thus, an excellent business venture. Because of great demand, it is a highly profitable business in India . There are several well-known and successful automotive retailers in the nation, including Bajaj, Hero Moto Corporation, MRF Tyres, Maruti Suzuki, BSA Cycles, and others. As a result, there is little question that a dealership company in the automotive industry is profitable.

2. Food Dealership Business

Food has always been in high demand and will continue to be so in the future since it is an essential requirement. Therefore, starting a food dealership business  is highly advantageous since you may obtain a dealership in a range of food goods, such as groceries, snacks, drinks, and bakery items.

3. Organic Food Dealership Business

Organic foods are gaining popularity among an increasing number of individuals, and the organic business is thriving. This offers a great market opportunity for starting an organic food dealership business. With a proper space and investment of around Rs 2 to 5 lakhs, you can even start a dealership franchise business. You can obtain approval of specific brands and integrate the products in your store to have a successful dealership business.

4. Health Care and Beauty Products Dealership Business

One can also start a business selling health and beauty items. It’s one of those modest lucrative company ideas that require little capital. You may obtain a dealership for various beauty and health products, such as medications, cosmetics, particular brands, personal care items, healthcare items, and so on. Your business dealership can thrive by showcasing well-known brands. It will assist you in increasing your company’s sales and earnings. You can also establish a home-based healthcare and beauty goods company.

5. Jewellery Dealership Business

The next dealership business that you may establish is a jewellery store. In India, jewellery is an essential aspect of women’s life. Jewellery business is a small-scale enterprise that you may launch from the comfort of your own home. There are several major jewellery companies with whom you may partner for your business, and you can obtain a dealership to sell their items. 

It is a lucrative and well-liked business venture among young people. However, to establish this business, you must have the expertise and a passion for it. To promote jewellery items, you must be knowledgeable about gems, purity levels, polishing, and so on. You may start a jewellery dealership business if you have a flair for creativity and an eye for details.

6. Furniture Dealership Business

The furniture business is another good dealership business concept. You have the option of selecting particular furniture pieces and narrowing down the characteristics that are in high demand. It is one of the latest business ideas available in India. Several dealership businesses make it possible for small company owners to get dealership services. You may choose portable, lightweight, versatile, and stylish furniture based on your clients’ needs.

You may select from a wide range of dealership business ideas , such as furniture, textiles, health and beauty products, and food, to mention a few. A dealership company may be established with little effort. Dealerships are a profitable business in India as compared to other small companies. Opening a dealership expands the company’s reach and clients. It also increases sales and profit margins for the firm.

How to start a dealership business?

Let’s go over the procedure for obtaining a business dealership. The following are the fundamental stages for establishing any dealership:

1. Make a business strategy for your dealership

As the initial stage, developing a dealership business plan can assist you in streamlining the whole process of establishing your company. A dealership business plan can assist you in determining your company’s investment, budget, capital, requirements, financial strategy, management, and operational plans. Various sorts of enterprises will require different business plans. Investigate the type of business you want to establish and prepare accordingly.

2. Determine your dealer

After deciding on a business and developing a business strategy, the next step is to find a dealer. To verify the dealer’s commercial operations, it is critical to identify them carefully and examine their legal documents. You may also verify the business’s work permit and license for security verifications.

3. Dealership agreement

The next step is to sign a dealership agreement. A business dealership contract is a document that outlines all of the terms and conditions of the business. It includes information such as the dealer’s name, limitations, and purpose. A dealership contract is created with the sort of business in mind. It assists a buyer in understanding the business’s constraints, processes, and rules. Both parties sign the agreement after reading it. It enables small company owners and entrepreneurs to sell the brand’s products officially and lawfully.

4. Build the business

A small company owner can begin the dealership business after signing the contract. The owner can sell the items online or offline, depending on their needs and interests. You may utilise social media platforms for advertising and company development. It will help you expand your business more quickly.

5. Locate a Franchisor

If creating a dealership from scratch sounds too difficult, you may always own a franchise, in which case you would not have to make a shop but rather own and operate a franchisee of a major brand.

6. Do Not Forget to Establish a Credit Policy

One of the complexities of beginning a dealership business is having a strong credit policy. Check to see who your buyers are and if they can buy from you. Also, ensure that you verify their credentials and set up your credit policy system properly.

7. Create a Powerful Network

One of the most excellent ways to start a business dealership company is to connect with other dealers, distributors, and suppliers and build a strong network. It should be noted that one of the most important components of the dealership company is networking.

8. Establish a Purchase Policy

The ideal method to manage a business dealership company is buying in bulk, repackaging them into smaller pieces, and reselling them at higher rates. Profits can be made in this manner.

9. Keep an eye on how your company is doing.

Maintain as much contact as possible with your retailers. It will not only help you keep them, but it will also help you grow your business.

Also Read:  How Do I Start A Dropshipping Business In India?

As a result, we may conclude that dealership companies are both profitable and in great demand. A dealership business is one of the most successful business ideas since it can be started with less work than a new firm from scratch. You may select from various dealership business ideas , such as a furniture dealership business , a clothes business, a textile business, a health care and beauty goods business, and so on. If you want to start a dealership company, read the procedures outlined in the article to create a successful business dealership .

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Top 10 Successful Dealership Business Ideas in India

The dynamics of business in India have changed over the last few years. The change is also visible in the dealership’s business model. You will come across many businessmen and small-scale entrepreneurs who get into the dealership business now. Before we talk more about the dealership business, let us first understand what a dealership business is. Under the dealership model, the brand or the manufacturer allows another entity to sell its products. The new entity selling the branded products will be called a dealer or a dealership of the brand.

Starting a dealership is relatively easy since you don’t have to worry about the branding or procurement of the products. Moreover, the amount of investment required to start a dealership is relatively low compared to other businesses. The important part of setting up a dealership business is understanding the market right. You need to open a dealership in the area where the consumption of those goods will be high. Today, we will talk about the top 10 good dealership business ideas in India and at the same time, we will also give you an idea of how you can start the dealership. So, let us move ahead and check out these details.

In This Article

Top 10 Best Dealership Businesses in India

Below are the top dealership business options in India. You can check them out and start the one as per your interest. So, without waiting any further, check out the best available options in India in.

1. Food and Organic Food Dealership Business

One business that will never run out of customers is the food business. If you provide proper quality and taste, you will always have customers available. You can start a dealership of baked goods, dairy items, frozen food or fresh meals. The growth of such businesses is always on the rise. In addition, the investment required here is also not much. Alternatively, you can play around with the idea of organic food. Many people prefer such food items, but you need to select the correct geographical location because of price and demand.

• Also Read: Licenses Required for Food Business in India

2. Construction Material Dealership

Construction business and real-estate development in India are on the rise. You can take advantage of this opportunity and start a construction material dealership. You can start something like a plumbing dealership where you will sell taps, showers, bathroom fittings and all such things. You can partner with companies like Jaguar and target niche customers by selling premium fittings. Today, many people prefer these accessories, and getting dealerships from these brands is easy. Alternatively, you can start a dealership of cement, wood or other raw material used in construction.

3. Beauty Products and Healthcare

The next option for you as a dealer is in the beauty and health industry. You can try this dealership out, as India’s wellness space is growing. You can start a medical device dealership or a beauty dealership like that of Nyka. This way, you can target the youth or the elderly population of the country. You can keep multiple brands in your dealership to improve customer conversion, enhancing your profits.

4. Sports Equipment Dealership

If you have a location around the school or sports complex, you can even try a sports equipment dealership. There are, again, many brands available in this space. If badminton is popular in that area, you can try a Yonex dealership and combine it with other sports or brands. Such brands are popular, and people are ready to pay a premium price for the quality of this equipment. If you have an interest in sports and the right location, then the sports equipment dealership will succeed. Moreover, the capital requirement for this is small.

5. Textile and Clothing Dealership

One of the largest industries in India is the textile industry. You can also exploit this opportunity by exploring the textile and clothing space. You can try a multi-brand clothing dealership, or you can try other textile like bedsheets and blankets. Here, you would need to offer competitive prices to attract the consumer. The readymade garment space is huge in India. You can even try a dealership of innerwear as this is, again, a huge space to explore.

6. Office Supply and Stationary

If you are interested in an office supply and stationary dealership, then the best area to open one would be around schools or offices. This will drive your sales without needing much advertising. You can keep all commonly used items like notebooks, pens, pencils, staplers, diaries, etc. For this dealership, you can also partner with brands like JK Papers, Classmate, Hindustan Pencil, and many more.

7. Furniture Dealership

At number 7, we have a furniture dealership. Today, there are many suppliers of readymade furniture. You will also find options where the customer can buy a package, and they can assemble the furniture themselves. You can start such options and register yourself on the e-commerce platform to improve your market penetration. Brands like Godrej, Nilkamal, IKEA, Durian, Damro and Evok are very popular in India. They also offer affordable furniture, and hence customers prefer these brands.

8. Petrol Pump Dealer

Moving on, a petrol pump dealership is a dream for many. If you have the right experience, land and capital, then you can explore a petrol pump dealership. Once the business starts, it operates in auto-pilot mode. You can start selling lubricants and other services like car wash at the petrol pump, and your profits will amplify exponentially. The only problem with the petrol pump is the licensing and getting the dealership. However, if you are interested, it is certainly worth giving it a try.

9. Chemical Dealership

Many people even opt for a chemical dealership. If you are interested in a chemical dealership, you must start the operations in an industrial area. In addition to this, you must also start only with non-hazardous chemicals. You can slowly expand your scope to hazardous industrial chemicals. You can connect with any big manufacturer or multiple manufacturers for your supply. Experience in the domain will be very helpful. This type of dealership needs more knowledge and less capital.

10. Automobile Dealership

Another popular option available in India is the automobile dealership. The margins on the car are around 5%, and then you earn extra on insurance, accessories and spare-part. These margins are much higher, and since the amount is huge, the profits are also impressive. To open an automobile dealership, you need to know the automobile industry and have the backing of huge capital. Depending on your budget and size of operations, you can choose between a four-wheeler or a two-wheeler dealership.

Also read: Best Trading Business Ideas in India

Can I Start Multi-Brand Dealership?

Yes, you can start a multi-brand dealership without any problem. If you look around yourself, you will find many such multi-brand dealerships. The electronic store is a classic example of the same. Similarly, a grocery store selling branded items is another example of it. You can start with one brand and expand your footprint as you progress or talk to multiple producers/suppliers simultaneously. This option is with you, but just make sure you have a sound supply chain before opening your business doors.

How Should I Proceed With Opening a Dealership?

Here are the brief steps you need to take to open a dealership. Check them out below.

• Business Strategy – You must approach multiple manufacturers before starting a dealership. In such a case, you would need a business plan, which will be your first step. In the business strategy, you must share the budget, capital, resources, operation and management plan with the key stakeholders. There are many formats available, and you can use those.
• Dealership Agreement – In the next step, you would need to determine the dealer and the brand that you would like to work with. Examine their legal documents and ensure that all things are in place. This is when you can talk to the producer and initiate a dealership agreement. This will have the purchase price details, terms and other things. Please read the agreement carefully before signing it.
• Workout the Business – Once the dealership is ready, you can start building your store and advertising. You would also need to hire staff for the operations. You must also establish a credit policy, purchase policy and return policy. In addition, you should work out your financials and the sales strategy. Remember that when the business is new, it needs to work even harder to acquire customers, so you may have to offer additional discounts. Once all of this is done, you can open the doors of your business for the customers.

Final Verdict

This was all about the dealership business in India. By going through all these details, you will have an idea of how to proceed in setting up the business. The amount of initial work required to set up the dealership is relatively less, and since you can open a multi-brand dealership, you can maximize your footfall easily. You can explore different options depending on the budget available to you. You can also get a loan for your dealership business, which can help you with the initial setup and inventory costs. If you still have questions about the dealership business idea, contact us via the comment section. We will try to cover your questions and help you with the information.

Dealership Business Frequently Asked Questions

1. What are the legal requirements for starting a dealership business in India?

Ans: To establish a dealership in India, you need to register your business, obtain the necessary licenses, and sign a dealership agreement with the manufacturer or brand. The specific requirements may vary depending on your location and the type of products you plan to sell.

2. What are the financial considerations for starting a dealership business?

Ans: Determine your initial investment, which includes the cost of setting up the dealership, acquiring inventory, and marketing. Additionally, consider ongoing expenses like rent, employee salaries, and utilities.

3. How do I find a suitable location for my dealership?

Ans: The location of your dealership is crucial. Look for areas with high foot traffic, visibility, and accessibility. Proximity to your target audience is essential, as is affordability.

4. How can I secure funding for my dealership business?

Ans: You can fund your dealership through personal savings, loans from banks or financial institutions, or by partnering with investors. Explore various funding options and choose the one that best suits your financial situation.

5. How do I market my dealership business in India?

Ans: Create a robust marketing strategy that includes both online and offline channels. Utilize social media, local advertising, and partnerships with local businesses. Ensure you highlight your unique selling points and offers.

6. What are the challenges in running a dealership business in India?

Ans: Common challenges include stiff competition, fluctuating demand, and managing inventory effectively. You must also stay updated with changing consumer trends and adapt to market shifts.

7. How do I maintain a successful dealership business in India?

Ans: Consistent customer service, maintaining a well-stocked inventory, and staying updated with industry trends are key to long-term success. Additionally, nurturing strong relationships with the manufacturer or brand is crucial.

8. What role does technology play in dealership businesses?

Ans: In the digital age, technology is vital for managing inventory, sales, and customer data. Implementing efficient software systems can streamline operations and improve customer experience.

9. Are there any government incentives for dealership businesses in India?

Ans: Some state and central government schemes may offer incentives to promote entrepreneurship, which can benefit dealership businesses. Research and take advantage of any available grants, subsidies, or tax benefits.

Anantha Nageswaran is the chief editor and writer at TheBusinessBlaze.com. He specialises in business, finance, insurance, loan investment topics. With a strong background in business-finance and a passion for demystifying complex concepts, Anantha brings a unique perspective to his writing.

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Best Dealership Business Ideas In India

A dealership is established when an entrepreneur allows a person or business to market a specific product. As a result, setting up a dealership business in India is profitable.

Top Dealership Business in India

In India, the following are several dealership business ideas.

Automobile Dealership Business

Automobiles can be an excellent business venture due to their high demand and profitability. You should be familiar with retail spare parts and accessories to sell automobile replacement parts and other related products to succeed in this dealership opportunity. The vehicle’s age and performance accelerate the market in automotive components. In an automobile dealership, consider selling new and used automobiles, spare parts, bicycles, accessories, etc.

Construction Material Dealership Business

There is no end to the construction of buildings. Satellite towns and cities are being developed at a rapid pace in India. This has resulted in a continuous increase in the demand for construction materials and related equipment. If you’ve some knowledge and exposure to construction-related matters, taking a construction material dealership might be worthwhile.

Health Care and Beauty Products Dealership Business

The healthcare and personal care skin products business in India increases by 15% every year. You can sell skincare products, health supplements, medicines and nutritional supplements in a health and personal care business dealership.

You may start a cosmetics and beauty care products dealership from the comfort of your home. It’s one of those medium-investment, high-profit dealership business opportunities. Depending on what you want to sell, you can offer the best deals on beauty products, health supplements, etc.

Apparel and Textile Dealership Business

Textile manufacturing is one of the most valuable and traditional global industries. While there is a huge manufacturing facility available in India, the scope for dealerships is enormous. The investment also is very less in this business as one can start an apparel dealership business even from a small place. From among the six types of commercial distributors namely importers, wholesalers, indenting agents, retailers, commission agents, and dealers, one can make a quick decision to start at the small scale level and move to a larger scale.

Also Check:  Textile Billing Software

Jewellery Dealership Business

A jewellery startup is a small-scale dealership opportunity that may be started from the convenience of your home. You can associate with major jewellery manufacturers and establish a dealership to market their products. To recognise and fully understand jewellery, you must know about jewels, polish, purity, etc.

Furniture Dealership Business

Furniture and interior decoration items have a high-profit margin. You can choose certain furniture items and customise their features to meet demand. It is easy to extend dealership services beginning with small company owners as there are various dealership options available

in which you can choose to customise based on customers’ needs.

It is critical to choose a suitable place to establish this business. You must also select products based on your targeted market. Customers’ needs can be satisfied by selecting lightweight, multifunctional, and elegant furniture. It is a lucrative business dealership opportunity.

Computer Hardware Dealership Business

The computer sector is extremely competitive and highly profitable too. Consider opening a computer hardware dealership that sells memory chips, hard discs, flashcards, external drives, monitors, cables, and game controllers, among other products.

Chemicals Dealership Business

Indian chemical industry is third among Asian manufacturers based on the production volume and sixth among all manufacturers globally in terms of production. An understanding of chemicals is required before you can take the chemical dealership opportunity. The chemical industry has numerous sectors, such as agricultural and industrial chemicals. You must choose the one that is best appropriate for you.

Organic Food Products Dealership Business

Organic foods are gaining popularity with increasing consumers, and the organic sector is flourishing. This presents an amazing market opportunity for organic food dealerships. You can locate the organic food product brands with good market demand, take the dealership of the same and sell their products. Choosing popular brands boosts your business’s earnings potential and profitability.

Also Check:

Sports Equipment Dealership Business

Being a sports equipment dealer, you can sell various products like sports shoes, sports kits, accessories, fishing equipment, and maybe even musical instruments. However, if you’re initially going to start, focus on only a few main categories.

Plastic Products Dealership Business

Plastic products are inevitable both in the household and in the packaging sector. Thus, making the plastic dealership business a very attractive and profitable venture. The availability of these items is cost-effective and starting a business requires not much technical knowledge as well. This allows any individual to make money by becoming an entrepreneur.

Children’s Toys Dealership Business

The market for children’s toys has exploded in recent years, whether electronic items, wooden toys, computer games, or plastic toys. You can get the dealership licenses for a few well-known brands and start yourself as a dealer of toys.

Ayurvedic Drug Dealership Business

Ayurvedic medications have recently received significant popularity in domestic and international markets. The best feature of Ayurveda is that treatment is free of side effects, which sets it apart from other pharmaceutical methods. Ayurvedic items can be sold in huge quantities to enable entrepreneurs to build a successful business in this industry.

Supply of Machinery and Manufacturing Equipment

Local business machinery is excellent for launching a dealership business. However, large plants and machinery generate significantly higher margins. Manufacturing equipment, such as food preparation and processing facilities, chemical processing facilities, and leather processing facilities, are among the most profitable items.

Packaging Supplies Dealership Business

Currently, the packaging sector is experiencing rapid development. New developments are being made to improve the appearance, shelf life, and other characteristics of products. As a result, many things are good for the supply chain. Some are paper bags, shrink-wrap labels and bags with pouches and nylon bags.

Paper and Office Supplies

This category includes a variety of value-added items. But, by and large, these products are consumed by schools, offices, and corporate entities. The most commonly purchased things include folders, envelopes, diaries, carbon, cards, journals, computer files, carrier bags, and leaflets.

FMCG (fast-moving consumer goods) Products

FMCG is an abbreviation for fast-moving consumer goods. The FMCG industry’s products are largely inflation-proof. This industry encompasses everything from spices to fruits and vegetables to tissue paper. Although the industry is so competitive, there is still a lot of scope for profit because the Indian market is so large.

Handicrafts and Gifts

You may make money from selling gifts and handicrafts in bulk if you plan your business effectively. The primary customers for your dealership consist of owners of small gift shops and artisan vendors. Make sure your products are of the highest quality and arrive on time, and you’ll see your business rise to new heights of success. This is a high-margin wholesale business that may be started from home.

How To Become a Dealer in India?

You can achieve success only if you master all necessary components, like strategic planning, implementation, demand, and capital. There are numerous ways to develop a dealership business in India. However, before starting your dealership business, you must first understand what it comprises.

Numerous procedures are required to establish profitable dealership business ideas in India. To start a dealership business, you need to follow the following eight steps.

• The first step is to select the products you wish to offer to become a dealer. This necessitates expertise with the things that are currently popular in your neighbourhood.
• After deciding on the products to sell, it’s time to contact local retailers who would buy them from you.
• Decide a location for your dealership, and then start stocking your inventory.
• It’s possible to have a franchise instead of opening your new shop, which eliminates the need to develop your business and allows you to focus on running a franchise of a well-known brand.
• It is vital to have a strong credit policy when running a dealership business. Verify your buyers’ eligibility to buy from you.
• Another best strategy to start a dealership business is to interact with other dealers, wholesalers, and suppliers.
• The most efficient approach to manage a dealership business is to purchase items in bulk, repack them into separate units, and resell them at a profit.
• Maintain a close relationship with your merchants as possible. It will boost your business’s productivity level.

These trendy and innovative best dealership business ideas are perfect for aspiring dealership entrepreneurs trying to get their foot in the market. Indeed, it is one of the most promising businesses to start, particularly in India. Even though you can make money, you can grow your business as it rises. It doesn’t take as much work to start a new business from scratch as you begin a dealership business. You can choose from many dealership business ideas such as furniture, clothing, textiles, health and beauty products, etc.

FAQs for dealership business

Who is a dealer.

As the name implies, a dealer is the one who routinely purchases things from manufacturers and then resells the same component to a retailer. A dealer often engages in dealing with a certain product or commodity. He/she conducts commercial trading for their advantage as a vital element of their business. They, like distributors, have the same authority to sell these products in their respective regions. As a result, there is a great chance to start a profitable business in this country through a dealership.

What paperwork is necessary to open a vehicle dealership business?

The following paperwork is required to set up a vehicle dealership business: - Identification of nationality - Certificates of education or a passport - Voter identification - The PAN number - Aadhar card - Valid driving licence - Address verification (ration card, electricity bill, etc.) - Specific details about the location - Bank account details - Licenses and certificates for businesses

How profitable are dealership businesses in India?

Dealerships are considered profitable in comparison to other types of small businesses. Establishing a dealership business widens the reach and consumer base of the business. Additionally, it enhances the business's revenues and profitability. The market is filled with demand for branded clothing, gifts, IT gadgets, and other items. As a result, it is a profitable business concept.

What are the most effective sales strategies for your dealership?

Successful dealerships frequently adopt the following methods. - Develop a sales team consisting of ambitious, dedicated, self-motivated, and goal-oriented individuals. - Clearly and concisely define your sales process - Concentrate on determining the buyer's unique requirements. - Make marketing more specific - Keep consistency in creative executions is critical.

How much capital is required to start car dealership business ideas in India?

The capital required to open a car dealership depends on the brand. Prices start at INR 10 lakhs and go to approximately INR 20 lakhs. The investment cost, however, may exceed INR 50 lakhs. If you go for high-end brands, the price will be much higher than opting for more affordable brands. High-end brands can cost up to nearly INR 1 crore. Depending on the car manufacturer, dealerships are charged different fees.

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How to start Battery Business in India?

• by SBH Team
• 34 Comments
• January 25, 2022

In a developing country like India, the automobile industry and the backup power system sector are growing rapidly year after year. The backup power system consists of batteries, generators, etc.

Keeping this in mind you can easily start a business that is related to the automobile sector and backup power sector.

One such business opportunity is starting a Battery business. There are already well-established battery brands in the country like Exide, Amaron, Luminous, Base, Okaya, HBL, etc.

You can partner with any of these brands and can run a successful battery business. Before you tie up with any brand make sure that the company manufactures both lead-acid batteries and lithium-ion batteries.

In this article, we will talk about how to start a battery business or battery dealership in India, which includes a business plan, the investment required, profit margin, space required, whom to contact, licenses, and documents required, etc.

In this Post

Business Model

You can sell Automotive batteries ( two-wheeler batteries & four-wheeler batteries ), residential inverter batteries, computer backup/UPS batteries, and distilled water in your shop.

There are two business models in the battery business.

i.) selling multi-branded batteries ii). Partnering with a single battery brand (also called dealership)

The major difference with these two models is,

In multi branding shop, customer has the option of bargaining and also they can swift to different brands. You can also sell the local brand batteries in a multi-branded battery shop.

In a single-brand shop, you can expect more profit margin compared to multi-branding. But there will be limited sales.

Battery business plan

• If you take a dealership from any brand, the company will directly supply the batteries to your shop.
• Multi-brand battery shops can get batteries from distributors from their area. The marketing guy will take the orders and supply the goods. Every battery brand has a distributor in each district or area level.
• Initially selling branded batteries would be a better option. Because the customer trusts the brand name, it will be easier to sell. As your business grows, include local brands too.
• This is a service-based based business. so you should have enough knowledge about the products to clear customer doughts.
• Inverter batteries are also available online. But people don’t trust because of service issues.
• Keep some used batteries of all kinds in your shop. You may temporarily give this used battery to customers until the warranty claim process is complete.
• Appoint at least one labor to fix batteries in shop and customer location. Fixing batteries at customer locations will definitely boost your sales.
• Network with local garages and workshops. Since they purchase regularly, you can give them some discount.

Selling used or Scrap batteries

• You can also earn good money from buyback or srcap batteries. Two-wheeler batteries approximately weigh 1 to 1.5 kgs, four-wheeler batteries weigh 10 to 12 kgs and inverter batteries weigh 50 to 70kgs.
• Buy these used or scrap batteries from the customer at a lump sum price and you can make a good profit. In the market, you will get 70 to 80 rupees per kg for a scrap or used batteries.

Types of equipment required

• Clamp meter or Volt meter – To check the battery voltage
• Hydro meter – To check the cell/acid gravity
• Battery recharging machine

Licenses and Registrations Required

You require the following licenses and registrations to start a Battery dealership in India.

• Shop & Establishment Registration – from the state government
• Trade Licence – from your municipality
• GST Registration
• Business Registration – sole proprietorship is enough
• Current bank account
• Business Insurance (Optional)

Any local CA or agency can help you in getting these documents.

If you lack the capital to start a business, you can contact any bank for a business loan. Banks like SIDBI provides loans for this kind of business.

Space required and Location

You require at least 150+ square feet of shop area to start a battery business.

You need space to display and store new batteries, to store buyback (scrape) batteries, and to keep the battery recharging machine.

The best location to start a battery business is high traffic areas, near garages/workshops, and petrol pumps.

Battery Dealership Cost

You require a minimum investment of approximately 7 lakh to 8 lakh rupees to start a battery business in India.

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The actual investment amount mainly depends on the quantity of inventory/stock that you are going to buy in the beginning.

Because a different segment of vehicles uses different types of batteries. So you should have stock for all segments.

Here is the breakdown of the amount,

• Dealership security deposit to company – 1 to 2 lakhs
• Battery Stock – min. 4 to 5 lakhs ( two wheeler, four wheeler and inverter batteries)
• Shop interior and signage – 25,000 rupees
• Battery re-charging machines – 15,000 to 25,000 rupees
• Other Expenses – 20,000 rupees
• Shop security deposit – 50,000 (depends on your location)

The ongoing expenses are labor/mechanic salary, utility bills, shop rent, and adding stock.

If you have a limited amount to invest, initially you can start with automotive batteries (two-wheeler and four-wheeler batteries ), later you can include inverter batteries.

Profit Margin in Battery business

From two-wheeler and four-wheeler battery sales, you can expect a profit margin of 20% to 30%. Inverter battery sales can give you a profit margin of up to 35%.

Profit margin in this business also depends on the stock volume. If you give a bulk order then you can expect more margin.

In the initial days, as your shop is new, it will be difficult to place large orders. As your business grows, so does your sales, later you can expect more profit.

Small battery brands or local brands pay you more profit compared to branded ones. But it would be difficult to sell local brands in the beginning.

So, this is about starting a battery shop business in India. I hope this article has resolved many of your doubts related to this business.

If you have any suggestions feel free to mention them in the comment box below. If you like this article kindly share it with your friends.

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ACG is an expert in Electric Vehicle Business plans for the Indian market. The EV plan is available for Two Wheeler, Three Wheeler, Truck, Bus, and Car segments. There are two versions available of the Business plan- the Standard and Customize plan. We also prepare the Business plan for other traditional vehicle segments, Suppliers, and Dealer Businesses.

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• Market & competition

2. Business Opportunity

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Petrol Pump Business Plan in India: A Step By Step Guide for Investment/Cost, Profit Margin, License/Permits, and Requirements

Table of contents, how much does it cost to open/start a petrol pump in india, time for building a petrol pump in india, requirements for starting a petrol pump business in india, business plan for starting a petrol pump in india, insurance requirement for opening a petrol pump in india, license/permits to open and operate a petrol pump business in india, how to market your petrol pump business in india, how to buy a petrol pump with no money down in india, profit margin in petrol pump business in india, how much does a petrol pump owner make per day in india, can a foreigner open a petrol pump in india, 9 tips to be successful in the petrol pump business in india.

Petrol pumps in India are a very lucrative business opportunity. In India, with a population of over 1.4 billion people and a growing economy, the demand for petrol is always high. Moreover, with the recent government initiative to promote electric vehicles, the petrol demand will only increase in the future. Apart from this, many middle-class people are buying vehicles the numbers keep growing every year. If you want to open/start a petrol pump business in India, this blog post will walk you through investment, license, building cost, profit margin, and business plan.

Petrol pump business plan in India

• The cost of the land/location on which the pump will be built.
• The cost of construction and outfitting the pump with the necessary equipment.
• The cost of licenses and permits required to operate the pump.
• Ongoing costs, such as electricity, labour, and maintenance, are associated with running the pump.

Assuming you already own the land on which to build the petrol pump, the construction cost will vary depending on the size and location of the pump. A small pump in a rural area will cost less to construct than a large pump in a major city. Outfitting the pump with all of the necessary equipment will also add to the cost. The cost of licenses and permits will depend on the state where you plan to open and operate the pump. Each state has its own requirements for licensing and permits, so it is important to research these costs in advance.

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Finally, ongoing costs, such as electricity, labour, and maintenance, are associated with running a petrol pump. These costs will vary depending on the size and location of your pump, but they can be significant expenses nonetheless. In India, usually, there will be a bidding process with each petroleum company (such as HP, BP, IOCL, and SHELL). The average cost of a petrol pump, including everything, will be around 1.5 cores to 2 crores (Again, this will depend on location, size and product offered). 

Building a petrol pump in India can take anywhere from six weeks to three months, depending on the location and other factors. The process typically starts with finding a suitable piece of land to build the pump. Once the land is secured, construction can begin. Building a petrol pump requires many materials and components, all of which must be sourced and put together correctly. Therefore, building a petrol pump in India depends on how quickly these materials and components can be sourced and assembled.

In some cases, building a petrol pump in India can be a relatively quick and easy process. However, there are often delays due to problems with sourcing materials or putting everything together. These delays can lengthen the process significantly, making it take anywhere from six weeks to three months to complete.

• You must be 18 and have a valid Indian passport/Aadhar/Residential proof. 
• You must have a minimum of Rs. 10 to 50 lakhs in capital investment.
• You must obtain a No Objection Certificate (NOC) from the oil company with which you wish to enter into an agreement for fuel supply. 
• You must obtain a Retail Outlet Dealer Agreement (RODA) from the oil company. 
• You must obtain a license from the Petroleum and Explosives Safety Organization (PESO). 
• You must construct a petrol pump premises as per the specifications/instructions laid down by the oil company and get it approved by PESO. 
• You must install equipment at the petrol pump premises per the specifications laid down by the oil company and get it approved by PESO.
• You must apply for registration of the retail outlet with the concerned Regional Transport Office (RTO).
• It is mandatory to have a soil/sand test before constructing a petrol pump on the proposed land.
• You must also have clearance from the environmental board.

If you are planning to open/start a petrol pump business in India, it is important to have a detailed business plan. This will help you to track your progress and ensure that your business is on track. There are multiple factors to consider when creating a business plan for your petrol pump business. These include the investment required, the location of your petrol pump, the target market, the competition, and the marketing strategy.

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• Investment: The investment required to start a petrol pump business in India can vary depending on the size and location of the petrol pump. A small petrol pump may require an investment of around Rs 2 lakhs, while a larger one may require an investment of up to Rs 10 lakhs. Therefore, it is a must to have a clear idea of the investment required before starting the business.
• Location: The location of your petrol pump is another important factor to consider. It is important to choose a location that is easily accessible to your target market. You should also consider the competition and the feasibility of setting up your petrol pump at the chosen location.
• Target market: Your target market should be clearly defined in your business plan. This will help you determine the best marketing strategies to reach your target market. You should also consider their needs and requirements when choosing the products and services offered at your petrol pump.
• Competition: It is important to research your competition before starting your petrol pump business.

In order to open a petrol pump in India, you are required to have insurance in place. This is to protect you and your customers in case of any accidents or mishaps. You will need to consider a few different types of insurance, and we have outlined them for you below. Public liability insurance is a very important type of insurance for a petrol station owner. This will cover you if someone is injured or their property is damaged due to your business operations.

It is important to ensure that your policy limit is high enough to cover any potential claims that could be made against you. Product liability insurance is another type of insurance coverage you should have. This will protect you if one of your products causes injury or damage to someone. For example, if you sell petrol and it is contaminated and causes an accident, this policy will cover the costs associated with the accident. Property damage insurance is also important for a petrol station owner.

This will cover the costs of repairing or replacing any equipment or property damaged due to your business operations. For example, if a fire breaks out at your station, this policy will pay for the damages caused by the fire. Finally, business interruption insurance is another type of coverage that can benefit a petrol station owner. This policy will pay for lost income if your business stops operations due to an insured event, such as a fire.

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To open and operate a petrol pump business in India, you will need to obtain a license from the Indian Oil Corporation (IOC). The IOC is the national oil company of India and is responsible for issuing licenses for petrol pumps. You must submit an application form and the required documents to apply for a license. Once your petrol pump application is approved, you will be issued a license which will allow you to open and operate your petrol pump business in India.

In addition to the license from the IOC, you will also need to obtain other permits and approvals from the local authorities to open and operate your petrol pump business. These may include building permissions, fire safety permissions, environmental clearances, etc. Once you have obtained all the necessary licenses and approvals, you can start your petrol pump business in India. 

As the Indian economy continues to grow, so makes the demand for petrol and diesel. This has resulted in a tremendous boom in the petrol pump business in India. However, with so many new players entering the market, it is becoming increasingly difficult to stand out from the crowd. Here are a few tips on marketing your petrol pump business in India: 

• Use traditional marketing methods: Traditional marketing methods, such as print and television advertising, can effectively reach potential customers.
• Use digital marketing: In today’s digital age, it is important to use digital marketing tools such as social media and search engine optimization (SEO) to reach potential customers. 
• Offer discounts and loyalty programs: Offering discounts and loyalty programs are a great way to attract and retain customers. 
• Use word-of-mouth marketing: Word-of-mouth marketing is still one of the most effective marketing tools. Make sure your current customers are happy with your service so that they can spread the word to others.

In India, petrol pumps can be bought with no money down through various methods. The most common method is to lease the petrol pump from an oil company. This option is available to those who need more money to buy the pump outright. Another option is to take out a loan from a financial institution.

This option may be more expensive in the long run, but it allows you to purchase the pump with no money down. A number of government schemes also provide financial assistance to those wanting to purchase a petrol pump. However, these schemes usually require that the applicant has a certain amount of land or property to offer as collateral.

The petrol pump business in India is highly competitive with very thin profit margins. The average profit margin for a petrol pump in India is between 1% to 2%. This means that for every Rs. 100 worth of fuel sold, the petrol pump owner earns only Rs. 1 to Rs. 2 as profit. Several factors contribute to the low-profit margins in the petrol pump business in India:

• The fuel cost constantly fluctuates, making it difficult to maintain stable prices at the pumps.
• The commission charged by oil companies on fuel sales is also quite low.
• Overheads such as rent, electricity, and staff salaries eat into any profits that are made.

Nevertheless, despite the low-profit margins, petrol pump owners continue to do good business in India thanks to the country’s large population and ever-growing economy.

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There is no definitive answer to this as the profit per day depends on how much petrol o diesel is sold. Again this will be based on the operation’s location, traffic, and size. For example, if the petrol pump sells 50,000 liters daily, the profit would be around Rs.10, 000.  

India is a land of opportunity for foreign investors. The Indian government has been opening up the economy to foreign investment and many sectors are now open to 100% foreign ownership. This includes the retail petrol sector. So, if you’re a foreign national interested in setting up a petrol pump in India, you can do so! However, there are certain things to keep in mind.

Firstly, you’ll need to obtain a license from the Indian Petroleum and Natural Gas Regulatory Board (PNGRB). This can be completed by filling out an application and providing supporting documents. Once you have your license, you’ll also need to find suitable land to build your petrol station. Setting up a petrol pump in India may seem hard at first, but with careful planning and research, it can be a smooth and successful venture!

• Know your target audience : It is important to know who your target audience is before starting a petrol pump business in India. This will help you decide on the location, fuel type, and other factors that need to be considered. 
• Get the required licenses : Before starting a petrol pump business in India, make sure that you have all the required licenses from the state and central government.
• Find a good location : A petrol pump should be located with a good footfall of potential customers. The location should also be easily accessible and have good connectivity.
• Invest in good quality equipment : Make sure that you invest in good quality pumps and other equipment to give your customers a positive experience. 
• Offer competitive prices : To attract customers, it is important to offer competitive prices for fuel and other services that you offer at your petrol pump. 
• Provide excellent customer servic e: Make sure that you provide excellent customer service so that your customers return to your petrol pump.
• Promote your busines s: Use various marketing channels to promote your petrol pump business so that more people know about it. 
• Keep your premises clean and tidy : First impressions matter; hence, it is important to keep your premises clean and tidy at all times. This will give a good impression to potential customers. 
• Be proactive in dealing with problems .

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The petrol pump business is profitable in India. However, the demand for petrol may go down as the Indian government has decided to move towards electric vehicles. The move comes as a part of the government’s plan to reduce air pollution and dependency on imported oil. So we wish you good luck in your next petrol pump/bunk business in India. If you plan to open a gas station business in the following states/cities, this article will help you reach your business goals.

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I would like petrol pump business in kerala, palakkad, chittur. Kindly provide all informations at your best.

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What's the best state for you », india's zoho plans $700 million foray into chipmaking.

India's Zoho Plans $700 Million Foray Into Chipmaking

FILE PHOTO: The logo of Indian multinational technology company Zoho is displayed at the Collision conference in Toronto, Ontario, Canada June 23, 2022. Picture taken June 23, 2022. REUTERS/Chris Helgren/File Photo

By Munsif Vengattil

NEW DELHI (Reuters) - Indian software firm Zoho is planning a foray into chipmaking and seeking incentives from the federal government, two sources with direct knowledge of the proposal said, with one of them pegging the investment plan at $700 million.

Zoho, established in 1996 and now headquartered in India's Tamil Nadu, offers software and related services on subscription to businesses in 150 countries, competing with the likes of Microsoft and Salesforce.

It is the latest company to seek financial sweeteners from the government to set up a chip fabrication plant.

Semiconductors are a key plank of India's business agenda, with a $10 billion package in place to boost the industry as it hopes to compete with countries such as Taiwan in a few years.

Zoho is proposing to manufacture compound semiconductors, which have specialized commercial applications and are made from alternatives to the more-commonly used silicon in chipmaking, the two sources said.

The proposal is being reviewed by the panel that drives India's chip initiatives at the IT ministry, they added. The ministry has sought more clarity from Zoho on the customers it intends to do business with, the second source said.

Zoho declined to comment, while the IT ministry did not immediately respond to a request.

The first source, who said the company had estimated an investment outlay of $700 million, said Zoho had also identified a tech partner to help set up the operation from scratch, without naming the firm.

In March, founder and CEO Sridhar Vembu said Zoho was planning a chip design project in the southern state of Tamil Nadu, without providing further details. Its plans to diversify into chip manufacturing have not previously been reported.

Zoho made annual revenue of over $1 billion in the financial year ended March 2023, according to media reports.

In February, India gave the go-ahead to construction of three semiconductor plants worth over $15 billion by firms including Tata Group and CG Power, with plans to manufacture and package chips for sectors including defence, automobiles and telecommunication.

India has estimated its semiconductor market will be worth $63 billion by 2026.

(Reporting by Munsif Vengattil in New Delhi; Editing by Mark Potter)

Copyright 2024 Thomson Reuters .

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Top carmaker plans to manufacture EVs in India. It’s not Tesla or BYD

The world's third-largest carmaker plans to manufacture evs locally by working with a chinese electric vehicle company called leapmotor..

Listen to Story

• Leapmotor vehicles expected in India by end of 2024
• Stellantis eyes India as export hub for Southeast Asia
• It sells vehicles from Jeep and Citroën brands in the country

Tesla might have postponed its entry into India despite the new EV policy, but Stellantis is considering manufacturing electric vehicles (EVs) in India, reported The Economic Times (ET).

The world's third-largest carmaker plans to do this by working with a Chinese electric vehicle company called Leapmotor at its facility in Thiruvallur, Tamil Nadu.

Stellantis owns several brands, such as Chrysler, Citroën, Fiat, and Jeep.

India’s electric vehicle policy was something that was negotiated by Tesla but it "certainly helps," Carlos Tavares, the chief executive of Stellantis told ET.

“This (the EV policy) is an opportunity that we did not study yet, but I understand the intention and I understand why you can be able to win (investments) for the country and from the carmaker that will come with EVs,” Tavares told ET on a video call.

India announced a new policy on March 15 to encourage investment in local manufacturing of high-end electric cars.

The government said it will allow the import of completely built-up electric cars that have a minimum cost, insurance, and freight value of $35,000 (Rs 29.2 lakh) at 15% import duty for a period of five years if companies make a minimum investment of $500 million to start local manufacturing.

Leapmotor for now is looking at selling affordable electric cars in India, which will mostly be priced under the cap specified in the policy.

Tavares said Stellantis is already manufacturing EVs in Thiruvallur under the Citroën badge and has sold fleets of the eC3 car to several companies in India.

“So far it's moving quite well, and I know that the local team is quite happy with those B2B sales,” the Stellantis CEO told ET.

Tavares further said that Leapmotor vehicles will make their way to India in the second wave of global expansion of the newly formed JV, Leapmotor International, in the last quarter of 2024.

“Any manufacturing facility that we have around the world can be used to support the profitable growth of Leapmotor overseas. We have a (production) capacity of 90,000 units at Thiruvallur, and so far it’s not saturated,” he said.

“While it is too soon to say, but as we both know the tariffs to import CBUs in India are very high. Most probably, if we are to bring Leapmotor to India, it would have to be through local manufacturing as it is for all the other brands we have," the CEO told ET.

He did not specify details of additional investments required to commence local manufacturing of EVs from Leapmotor in India. The company is looking at introducing a small A-segment car, T03, and a D-segment vehicle, C10, to begin with.

Stellantis currently sells vehicles from Jeep and Citroën brands in the country. Citroën-badged vehicles are made in Thiruvallur.

In addition to local sales, Tavares said Stellantis is looking at leveraging India as an export hub to ship out more vehicles, particularly to markets in Southeast Asia.

In response to a question on whether Stellantis is looking at exporting electric vehicles under the Leapmotor badge from India, he said that they are already exporting vehicles C3 and eC3 out of India to Southeast Asia.

“We are already exporting vehicles – C3 and eC3 - out of India to Southeast Asia. So that's something that we are eager to do. We will try to continue to expand the exports out of India to Southeast Asia at this stage," Tavares told ET.

Citroën, a relatively new entry in the country, exported 3,278 vehicles last fiscal year compared with 204 units in FY23.

Citroën recently announced fresh investments of Rs 2,000 crore in India for various initiatives including introducing new vehicles with petrol as well as electric powertrains.

Amsterdam-based Stellantis on Tuesday signed a binding agreement with China’s Leapmotor to form Leapmotor International, after they received regulatory approvals for the joint-venture deal. Stellantis controls a majority stake of 51% in the JV.

Stellantis acquired about 21% stake in Leapmotor for 1.5 billion euros in October 2023, paving the way for the formation of the JV company. The JV has exclusive rights to manufacture, sell and export Leapmotor vehicles outside of China.

“We are now in the planning phase to go to the markets and start exporting vehicles out of China to the rest of the world,” Tavares said.

Leapmotor will enter nine European countries in the first phase starting September: Belgium, France, Italy, Germany, Greece, the Netherlands, Romania, Spain, and Portugal.

The brand will be sold across 200 dealerships in the region. In the second phase, Leapmotor International will enter South America, the Middle East, Africa, India, and the Asia Pacific regions.

The JV plans to bring in a portfolio of six models to international markets by 2027. Affordability is right now the number one problem with EV expansion worldwide.

“With Leapmotor, we are going to be able to bring faster to our markets affordable EVs that will not only contribute to the profitable growth of Stellantis, but of course, they will also contribute faster and in a more efficient way to fixing the global warming issue that we have to fix as humanity,” said Tavares. Published By: Sonu Vivek Published On: May 15, 2024

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Tesla remains 'silent' on its India plans: Report

Elon musk, who was supposed to visit india on april 21-22, postponed his trip at the last moment due to "very heavy tesla obligations.".

• Updated May 17, 2024, 8:32 PM IST

Tesla has not yet communicated its India plans under the new EV policy, an official said on Friday. Elon Musk, who was supposed to visit India on April 21-22, postponed his trip at the last moment due to "very heavy Tesla obligations."

Musk, the CEO of Tesla, was also scheduled to meet Prime Minister Narendra Modi during his visit.

"They (Tesla) are just silent.. the (EV) policy was always meant for everybody," the official said when asked whether the company has communicated its plans to the government.

The official added that companies announce their own commercial decisions.

Earlier in April, Musk confirmed his visit to India in a post on X, saying, "Looking forward to meeting with Prime Minister @NarendraModi in India."

In June last year, during Modi's US visit, Musk met with him and expressed plans to visit India in 2024, expressing confidence that Tesla would soon enter the Indian market.

Musk's proposed visit had raised expectations that he would announce plans for Tesla to establish a presence in India, as well as his satellite internet venture, Starlink.

It was anticipated that he would reveal plans to set up a Tesla manufacturing unit in India, involving potential investments worth billions of dollars, and outline a strategy for selling Tesla electric cars in the country soon.

Additionally, Musk is interested in the Indian market for Starlink, awaiting regulatory approvals. In the past, he has called for a reduction in import duties to sell Tesla cars in India.

Musk's planned visit to India followed the government's announcement of a new electric vehicle policy. This policy offers import duty concessions to companies that set up manufacturing units in the country with a minimum investment of $500 million, aiming to attract major global players like Tesla.

Last month, Tesla's advisor, The Asia Group (TAG), attended the first stakeholders' meeting on the new EV policy. Participants included representatives from Vietnam's EV maker VinFast and major Indian manufacturers like Maruti Suzuki, Hyundai, Tata, Mahindra, Kia, Skoda Auto Volkswagen India, Renault, Mercedes-Benz, BMW, and Audi.

The meeting aimed to gather input for framing the new EV manufacturing policy guidelines. According to the policy, companies setting up EV passenger car manufacturing facilities in India can import a limited number of cars at a reduced customs duty of 15% on vehicles costing $35,000 and above for five years from the date of government approval.

Currently, cars imported as completely built units (CBUs) face customs duties ranging from 70% to 100%, based on engine size and cost, insurance, and freight (CIF) value. CBUs with a CIF value over $40,000 incur a 100% duty (for petrol engines over 3000 cc and diesel engines over 2500 cc), while those under $40,000 incur a 70% duty (for petrol engines under 3000 cc and diesel engines under 2500 cc).

The new EV policy aims to make India a manufacturing hub for EVs and attract investment from global manufacturers. Last year, Tesla requested duty reductions from the Indian government to import its vehicles into the country.

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Zimbabwe’s illegal forex dealers use WhatsApp to find clients, evade police

Zimbabwe clamps down on black market trading it blames for devaluing its newly launched ZiG local currency.

Harare, Zimbabwe – The entrance to the main gate at the Budiriro shopping centre, a busy mall south of Zimbabwe’s capital Harare, used to be a hive of activity where informal forex dealers had set up makeshift “offices” on the pavement.

Now the area is all but abandoned.

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The smartly dressed young boys and middle-aged men who would stealthily trade foreign currency with shoppers have not set foot there in weeks to avoid police raids.

In Zimbabwe, which has been beset by a decades-long economic crisis characterised by hyperinflation, a 54 percent unemployment rate and highly volatile local currencies, the more stable United States dollar is the preferred medium of exchange.

Everyone from state utilities to street vendors accepts payment in US dollars. Because of the popularity of the greenback, black market forex dealing is a thriving side hustle with thousands earning a living from the practice.

In April, in the government’s latest attempt to stabilise the economy, Zimbabwe’s central bank launched a new currency, Zimbabwe Gold, or ZiG .

Soon after, Zimbabwean police began cracking down on informal forex dealers and arresting them in their numbers. The authorities blame illegal currency dealing for distorting the exchange rate and devaluing the local currency, and want to ensure the ZiG is accepted and does not lose value rapidly like its predecessor.

To date, more than 70 street forex dealers have been arrested. But instead of curbing them, it has driven them underground and towards more creative means of doing business.

At a tuck shop about a kilometre from where he used to work at Budiriro shopping centre, forex dealer Darlington Murazva* has set up a makeshift office.

The stocky 30-year-old scrolled through the WhatsApp messaging app on his Samsung smartphone, and pressed play on a voice note that arrived in a group chat he’s in with other foreign currency dealers and vendors.

“The police are in Glen View right now. They didn’t find anyone,” the voice said.

Murazva, who has been a forex trader for 11 years and mostly operates informally, used to have a strategic spot at the entrance to the mall where he would sit on a plastic stool scouting for passing shoppers.

When the police raids started, he and the other traders fled. They are now positioned all over Harare – and give one another a heads-up about movements of the police.

“Now, the police can’t find us. We are always two steps ahead,” he said with a wry smile.

“We know where they are in real time through our fellow traders in the surrounding areas.”

Pockets of opportunity

The biggest sources of foreign currency in Zimbabwe are diaspora remittances and exports. Zimbabwe allows its citizens to open USD accounts where they can deposit or receive the greenback. They can also withdraw hard USD notes from banks. Companies can also source forex from the official auction market.

Away from official channels, though, people regularly buy and sell USD to informal forex dealers depending on their needs. Because street dealers offer better and more market-driven rates of exchange, Zimbabweans prefer to deal with them instead of banks or official currency exchanges.

Black market dealing is illegal, so the exact number of traders is not known. But it is thought there are a couple of thousand. The WhatsApp group Murazva belongs to has 247 members.

Though usually in competition with one another, the dealers have set aside their rivalries to join forces and help one another avert arrest.

Recent reports that went viral on social media saying 60 arrested dealers were sentenced to three years in jail have also created jitters in an already unnerved community.

Moving online has not only been a safety measure for dealers but also a new way for some to continue conducting business.

Steven Tambudze*, 40, who has been a forex dealer for almost half of his life, said WhatsApp has been a real boon in recent weeks.

“Although this has been a very difficult time for other dealers, business has been very good for me,” Tambudze told Al Jazeera at the Highglen cross-border bus terminus, where he waited for a client.

“Most of my deals come through WhatsApp now,” he said.

Some of his former clients who he lost track of because they started trading with other dealers in the city have also returned, he said, explaining that with the raids people prefer to deal with someone they know and trust, and now reach out to him directly by phone and messaging app.

Tambudze said he never meets random people and only deals with clients he personally knows.

Murazva also uses WhatsApp to continue working. However, he is cautious. He never mentions the word ZiG on an actual phone call and never talks about exchange rates or anything that may identify him as a dealer, out of fear the authorities may be listening in.

When he gets a call, he tells potential clients to chat with him over WhatsApp, which he said he trusts a bit more because of its end-to-end encryption.

“One must never give safety a day off,” he told Al Jazeera.

‘Keeping our heads above water’

On the streets, forex traders all have their own ways of approaching customers. At the mall, Murazva would sit on his plastic chair at the entrance until he spotted a potential customer. In a hushed tone, he would then approach the passerby with a whispered deal to change dollars into local currency or vice versa.

Over WhatsApp, clients now contact a dealer they know when they are looking for currency. The dealer then posts a message on the WhatsApp group letting the other traders know they would like to make a currency exchange.

Other interested traders get in touch via inbox with an offer and a rate is agreed.

From there, a payment in local currency is made electronically through a bank account and a physical meeting is arranged for the collection of the hard USD cash.

The dealers in the group are a community who know each other and therefore have a level of trust.

Other traders also use WhatsApp’s broadcast feature, which allows users to send a single message to multiple recipients simultaneously with one click.

The recipients of a broadcast cannot see each other, ensuring privacy. This comes in handy for forex dealers who are trying to lay low and still earn a bit of income.

“The broadcasts are also helping a lot and are far more convenient because one can reach a number of dealers,” Tambudze said.

Murazva is grateful to messaging apps for helping dealers eke out a living amid the turmoil.

“If it wasn’t for WhatsApp groups, we would have starved. We are keeping our heads above the water,” he said.

The veteran dealer feels the police onslaught is a passing phase.

He said this was because when the central bank introduced the bond notes, a currency that forms part of the Zimbabwe dollar, in 2016, the police launched a similar blitz.

“The police operation is not new. We are used to them. Whenever they introduce a currency, we get arrested,” Murazva said. “But they will stop soon.”

Stopgap measures

The new ZiG currency is already devaluing against the US dollar. To date, the currency has depreciated by as much as 25 percent on the black market and is trading at Zig20:USD1. Officially, the rate is about Zig13.5:USD1.

Harare-based economic analyst Rashwhit Mukundu said the fast devaluation speaks to a lack of confidence in the local currency.

However, authorities blame the decline of the ZiG and the collapse of its predecessor on the black market foreign currency dealers. They say dealers pay much more than what is offered at the official rate, driving the currency down as it depreciates against the US dollar.

Informal dealers reject the idea that they are to blame.

Meanwhile, economists and critics accuse the central bank of flooding the market with local currency which is then used to buy US dollars from street forex dealers. Local government contractors, who are usually paid in local currency – which amounts to billions in bank notes – then trade these notes for US dollars on the black market, causing an oversupply, which fuels inflation.

“The real challenge in this economy is lack of confidence in the local currency because people have lost their savings and capital to hyperinflation in the past,” said Gift Mugano, a visiting professor of economics at the University of Zimbabwe Business School.

He told Al Jazeera the arrest of forex dealers was a stopgap measure to deal with the currency crisis, but not a wise idea.

“The question is: how do we restore confidence? You don’t arrest people to foster confidence. The moment you force people, you lose the plot,” he said.

For Mugano, the clampdown is a sign that the authorities have simply “run out of ideas” on how to deal with the currency problem.

“The black market is still thriving. Government is refusing its own money to pay for passports, fuel and other services,” he said.

Mukundu, meanwhile, said the police clampdown was an exercise in futility.

“It’s a case of stitching up one’s behind to stop a diarrhoea. The Zimbabwean government and the central bank are not addressing the fundamental issue of lack of confidence in the Zimbabwean currency,” he told Al Jazeera.

For Mukundu, past experiences with inflation and ongoing economic crises make people want to hold on to US dollars and other stronger currencies over their own.

“The people of Zimbabwe now see value and wisdom in storing economic value in foreign currencies,” he said. “It’s a culture and economic system that has been built over the years that supports storing value in such currencies.”

*Name changed to protect privacy.

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Reporting by Jaspreet Kalra; Editing by Mrigank Dhaniwala

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