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2WHEELER MULTI-BRAND REPAIR AND SERVICE

STUDIO A PROJECT REPORT TO PROMOTE SELF-

EMPLOYMENT / ENTREPRENEURSHIP

July 24, 2017

1.1.1.1.1.1.1.1.4 THE AUTHORIZED TRAINING PARTNER

1.1.1.1.1.1.1.1.2 In association wirh

presents

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Table of Contents

INTRODUCTION ........................................................................................................................ 1

MARKET POTENTIAL .............................................................................................................. 1

BUSINESS MODELS FOR THE FUTURE ................................................................................ 2

New market-impacting trends in organized multi-brand two-wheeler servicing outlets ........ 3

AUTOTECH CENTER LIMITED – At a Glance ....................................................................... 3

ASPIRE KNOWLEDGE AND SKILLS INDIA (P) LTD. – At a glance ................................... 5

AUTOTECH-ASPIRE – The Association ................................................................................... 6

FUTURE INDUSTRY GROWTH DRIVERS ............................................................................. 6

BASIS AND PRESUMPTIONS OF THE PROJECT ................................................................. 7

IMPLEMENTATION SCHEDULE ............................................................................................ 8

TECHNICAL ASPECTS ............................................................................................................. 8

Modalities of Services ............................................................................................................. 8

Repairs and Servicing of two-wheelers ................................................................................... 9

Sublet Services ........................................................................................................................ 9

Quality Specifications ............................................................................................................. 9

Pollution Control ................................................................................................................... 10

Energy Conservation ............................................................................................................. 10

FINANCIALS ............................................................................................................................ 11

REPAYMENT SCHEDULE AGAINST FINANCIAL ASSISTANCE ................................... 15

SNAPS OF ASSETS FOR REFERENCE ................................................................................. 24

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INTRODUCTION

The Automobile Repairing & Servicing Workshop business is a viable business if it is operated

with a good business acumen that involves a thorough knowledge and experience of the repair

and service operations and also managing the jobs with the right type of skilled manpower, as

well. When these factors combine with good customer relationship management and effective

business development skills, the business is expected to yield considerable profits which are

expected to grow over the years.

With the advancement of technology, varieties of bikes with a lot of features are being

introduced in the market and more and more Multi-national companies are entering this field.

Bikes are now a day’s considered as integral part of human lifecycle. It is the style statement of

youths besides a convenient mode of transport at cheaper rates. The responsibility to provide

after sale service lies with the suppliers which are restricted to urban areas only and also

comparatively costlier. A dire need of service centers has been envisaged in urban and also in the

rural areas, as well. Especially, in remote/rural areas where bikers are comparatively more than

the urban areas, the need is felt more frequently. However, adequate facilities are not available in

many Urban or Remote areas for servicing of these products. Thus, a 2-wheeler repair and

services centre, preferably in rural areas can be a breakthrough for young entrepreneurs to gear

up their livelihood. Thus, it is undoubtedly, a profitable venture to cater to the need of the public,

be it in rural or urban areas.

MARKET POTENTIAL

Times of India, in its publication dated Aug 18, 2016, cited that Private vehicle sales are believed

to be largely responsible for the spurt in registration of vehicles which touched an all-time high

of 1.96 crore in 2015 — that's almost 53,720 vehicles hitting the streets every day.

It also stated that the annual registration of vehicles was less than 10 lacs till 1993, registrations

continued to grow steadily after that with 2010 seeing a quantum leap. In 2014, the total

registrations stood at 1.94 crore. According to vehicle registration details, UP saw the highest

number of registrations of 24.38 lac vehicles in 2015. Maharashtra was second highest at 19.91

lac registrations; followed by Karnataka that recorded 15.15 lacs. Delhi registered 6.27 lac

vehicles.

Statistics provided by Society of Indian Automobile Manufacturers, the Apex National Body

representing Indian Automobile Industry (SIAM), on the Performance of Auto Industry during

2016 -17 states that the industry produced a total 2,53,16,044 vehicles including passenger

vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in April-March

2017 as against 2,40,16,599 in April-March 2016, registering a growth of 5.41 percent over the

same period last year.

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It further states that

The sales of Passenger Vehicles grew by 9.23 percent in April-March 2017 over the same

period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicles and

Vans grew by 3.85 percent, 29.91 percent and 2.37 percent respectively during April-

March 2017 over the same period last year.

The overall Commercial Vehicles segment registered a growth of 4.16 percent in April-

March 2017 as compared to the same period last year. Medium & Heavy Commercial

Vehicles (M&HCVs) grew by 0.04 percent and Light Commercial Vehicles grew by 7.41

percent during April-March 2017 over the same period last year.

Three Wheelers sales declined by (-) 4.93 percent in April-March 2017 over the same

period last year. Passenger Carrier sales declined by (-) 8.83 percent and Goods Carrier

sales grew by 12.75 percent in April-March 2017 over April-March 2016.

Two Wheelers sales registered a growth at 6.89 percent during April-March 2017 over

April-March 2016. Within the Two Wheelers segment, Scooters, Motorcycles and

Mopeds grew by 11.39 percent, 3.68 percent and 23.02 percent respectively in April-

March 2017 over April-March 2016.

Urban transport expert N Ranganathan said the country's vehicle population is likely to touch at

least 35 crore from the present 18.6 crore in the next 20-30 years. He said a 7% growth in GDP

usually results in a 10% increase in demand of transport.

BUSINESS MODELS FOR THE FUTURE

CII commissioned Frost & Sullivan to prepare a report on the automotive aftermarket in India.

The in-depth study reveals how new business models are driving this sector at a time when

connected devices and e-retailing are making their presence felt across the country. The Indian

economy, which is currently the world’s seventh largest and growing at 7.5 percent, could drive

past the UK and France in the near future. For a country with the youngest population in the

world, connectivity has become the growth mantra and by 2025 it is estimated that there will be

4 billion connected devices in India. The coming years will see new market trends that are likely

to impact the aftermarket. Vehicle manufacturers will explore entry into the business of multi-

brand services through organized multi-brand outlets and authorized business partners who

can invest in expensive garage equipment. Mahindra First Choice is one such company which

has done this successfully. Bosch has been successfully expanding its horizons.

Online e-retailing, which is the new global trend, will emerge in India and enable consumers to

compare market prices and shop online. The Goods and Services Tax will also impact

stakeholders in the automotive value chain, helping them reap the benefits of improved operating

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economics. This is as opposed to the current scenario where the end-consumer price bears the

brunt of the cascading effect of multiple taxes along the value chain.

The Frost & Sullivan study says auto parts e-commerce in India is still at a nascent stage due to

the limited presence of major players, small product portfolio and lower customer awareness

levels. There is also trust issues associated with buying parts online. In 2014, the online auto

aftermarket in India was estimated at around $20 million (less than one percent of the overall

parts aftermarket at a retail level) and is expected to increase at a CAGR of 7 percent to $150

million by 2020. There are huge opportunities to be had in the B2B space due to speedy growth

of organized and independent workshops and customers being positively disposed towards them.

The key market challenge to auto parts e-commerce is the widespread menace of fake parts.

Also, no major vehicle manufacturer is currently very active online in the selling of pure parts

and services. If at all, some of them focus on vehicle care and accessories which is a booming

segment. There is also the challenge of logistics and many companies struggle to supply parts to

different parts of the country due to the high cost of doing so.

New market-impacting trends in organized multi-brand two-wheeler servicing

outlets

Organized service garages like Carnation, MyTVS, and Mahindra First Choice are gaining

ground and will become big influencers in the vehicle maintenance space. These players are

aggressively planning to enter Tier-1 and Tier-2 cities in the near future. Likewise, AutoTech is

entering into the market, especially Maharashtra with a view to open 300 multi-brand services

centres through organized multi-brand outlets and authorized business partners who can

invest in equipment. It is baptized as AutoTech Multi-Brand 2-Wheeler Service Studio.

AUTOTECH CENTER LIMITED – At a Glance

AUTOTECH CENTER LTD., a new generation business house with basket full of idea that

forms a pioneer establishment in automobile service industry with advanced and Hi-Tech

technology.

The core sight of the establishment is to take the initiative to new

heights by providing invaluable automobile services across India.

The business model adapted by AUTOTECH is a Spoke-hub

Model enabling the AutoTech Multi-brand 2 Wheeler Service

Studios connect to the Hub at the centre for all types of spare

parts, vendor supports and above all centralized order-using

Digital Application.

The business model of AUTOTECH CENTER LTD., is such that it will provide Hi-class

services to demanding automobile sector. It will not only generate huge employment but will

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also boost more and more MSMEs to produce spare parts and

accessories for the automobile industry based on the regular

demands.

The organization has a series of services to be rendered to the

beneficiaries who intend to start a 2-wheeler repair workshop.

The following chart shall enable to understand the services

rendered under on-roof as HUB to the each beneficiary (SPOKES) who wishes to be an

entrepreneur, or an employee willing to get attached to any of its centers in India.

AutoTech

(HUB)

R& D Activities

Skill-based Training through ASPIRE

KNOWLEDGE AND SKILLS INDIA (P)

LTD.

Set-up support through Loan

Assistance

Logistics & Inventory

Management -Maintaining

centralised store of spares and accessories

Centralised Advertiisement

Centralized bookings through

Common App (Digital Platform)

Brand Positioning and Marketing

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ASPIRE KNOWLEDGE AND SKILLS INDIA (P) LTD. – At a glance

Aspire Knowledge and Skills, an ISO 9001:2008 certified, engaged in skill education for

vocational skill development and livelihood improvement, since 1998. It has partnered with

various State and Central Government bodies across India for diverse skill imparting initiatives.

ASPIREKS

is accredited as training partner by Sector Skill Councils in the sectors of Electronics,

Telecom, Capital Goods, Automotive, Retail, BFSI and F&B. Moreover, it has 50+ training

centers across India and key centers in Pune, Maharashtra impart global knowledge and skills to

students. Also, it is associated with more than 40 colleges wherein the training programs are

being imparted to meet the global demand of employment in diversified sectors.

At Aspire Knowledge and Skills, the technology platform provides the student with interactive

digital content. Its sophisticated training facility, industry relevant curriculum is aligned with the

NSQF standards. Its panel of subject experts and sector specific guides keep the students abreast

with the latest knowledge trends. Quality management and monitoring teams work in tandem

with the national education heads focusing on imparting quality knowledge, student placement

and corporate business. The programs are designed in as per the requirements in the diversified

sectors in compliance with NSQF standards. The following statistics speaks about our past one

year of successful execution with rspective Sector Skill Councils.

Affiliation with

concerned SSC

YES Automotive Skills Development Council (ASDC)

Retailers’ Association Skills Council of India (RASCI)

Electronics Sector Skills Council of India (ESSCI)

Telecom Sector Skills Council of India (TSSC)

Affiliation with

NSDC

YES We are registered Training Partner of NSDC affiliated to

Electronics Sector Skill Council of India.

Past Training Performance PMKVY Fee Based

Programmes

Other Government

Schemes

Total Number of Candidates trained

in last 1 year*

8550 62 1545

Total Number of Candidates certified

in last 1 year

6100 56 970

Number of Candidates placed / self-

emloyed in last 1 year

487 38 227

Number of Functional (own, not

franchised) Training Centers

bifurcated state wise

1. MAHARASHTRA : 6

2. GUJARAT : 1

3. KARNATAKA : 1

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AUTOTECH-ASPIRE – The Association

The association reveals the execution of the projects shall mandatorily follow the certification of

every beneficiary under the respective QPs of ASDC before they, either opt for entrepreneurship

or placement or apprenticeship. The QP is NSQF compliant and shall be operated under the aegis

of ASDC, Govt. of India.

The beneficiaries shall be able to leverage on the certification done by ASDC, as it shall add

value to enable them availing financial assistance through AutoTech to establish their own 2-

Wheeler Multibrand Service and Repair Studio.

The proposed programs are –

a. Auto Service Technician (Two and Three Wheelers) – ASC/Q1411

b. Car Washer and Assistant Service Technician – ASC/Q1417

c. Dealership Sales and Value Added Service Executive – ASC/Q1012

d. Dealership Telecaller Sales Executive – ASC/Q1011

e. Showroom Hostess_Customer Relationship Executive – ASC/Q1111

ASPIRE

KS volunteered the movement by taking charge of conducting the training programs and

together with AutoTech, it would train the beneficiaries with a view to build a stronger, vibrant,

empathic and developed society, before they take up the assignment of establishing 2-wheeler

multibrand service and repair studio.

Thus the aim of skill–education imparted would bring changes not only in the amount of

knowledge gained but also in the abilities to do so, to think and to acquire habits, skills and

attitude which characterize an individual who is socially accepted and adjusted in Automotive

Sector.

The association believes that quality skill–education is the key to overcome poverty in a single

generation not only in terms of finance but also the skills the beneficiary acquires. And the same

is fundamental; in creating a future for human security, community development and progress of

the nation.

The association also aims at creating human assets and extending the participation in nation

building jointly; for overall development of the Indian Economy with a common aim to fulfill

the national mandate of generating skilled and directly employable manpower in Automotive

Sector, in particular.

FUTURE INDUSTRY GROWTH DRIVERS

The growths in the vehicle parch and aging vehicles will boost the independent aftermarket in

India. Some of the key growth drivers in the future will be:

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Poor condition of roads: Poor road conditions in different parts of the country resulting from

the use of substandard raw materials, overloading, and weather conditions cause great damage to

parts, resulting in faster replacement which in turn translates into higher demand for parts in the

aftermarket.

Regular scheduled vehicle maintenance: Of vehicle owners, 90 percent carry out regular

maintenance to improve performance and life of the vehicle. This would drive the aftermarket.

However, 22 percent of the owners report that they do not follow the manufacturer’s

recommended schedule for maintenance, as they find it to be too expensive and frequent.

Increasing vehicle age / kilometres driven: Indian consumers tend to use their vehicles longer

and so the number of vehicles older than seven years will grow. As the road infrastructure

improves (currently, only 50 percent paved roads), consumers will drive more. Both these factors

will drive the aftermarket.

Steady increase in the car parch: Vehicle sales have been robust until 2012. They dipped in

2013 but have shown strong growth since then. This will result in an increased car parch, which

is forecast to grow by 13.4 percent until 2021. This will drive demand for parts in the

aftermarket.

BASIS AND PRESUMPTIONS OF THE PROJECT

i. The Scheme is prepared on the basis of single shift working 300 days in a year on 75%

efficiency. However calculations are made on 100% efficiency.

ii. Maximum one-year period is envisaged for achieving 60% capacity Utilization.

iii. The maximum capacity utilization on single shift basis for 300 days a year. During first

year and second year of operations the capacity utilization is 60% and 60% respectively.

The unit is expected to achieve 80% capacity utilization from the fifth year onward.

iv. Wages are based on the prevailing wages in the Maharashtra State.

v. Interest on loan is taken as 6% on an average.

vi. Margin money is taken as 25%.

vii. The cost of land, construction charges, cost of machinery and equipment, raw materials

and consumables other expenses etc. initiated in the profile are based on the prices

prevailing at the time of project preparation. Therefore, they are subject to necessary

changes from time to time based on local conditions.

viii. Estimated life of the project is about 5 years and the normal loan repayment period is

about 5 years.

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ix. Cost of the machine has been taken on the basis of current market rate at the time of

preparation of Scheme.

x. Prices of raw materials are taken on the basis of current market rate at the time of

preparation of Scheme.

xi. Rental charges have been considered as per rates prevailing in the areas of Maharashtra.

IMPLEMENTATION SCHEDULE

Six Months are required from the project preparation to actual commercial activities for the

provisional registration with Commissioner of Industries/DIC & others.

TECHNICAL ASPECTS

Modalities of Services

As there is no defined procedure for repairing two-wheelers as the repairing of vehicles usually

depends on the brand & model due to different design concept used by companies in

manufacture and fast technological changes in era of upgraded vehicle designs. Minor fault may

be rectified with little experiences however major fault repairing requires knowledge, skills and

experience.

Thus three main critical factors that affect the decision to invest in the proposed business setup

are:

a. Hands on Experience

Having a thorough knowledge and hands on experience of all the relevant technical details is a

must for entry into this business. Relevant work experience is the most important pre-requisite

because it has a direct impact on the successful management of the business.

b. Marketing Skill

Another critical factor is that the entrepreneur must have effective PR & marketing skills. These

marketing skills should enable the entrepreneur to carryout business development activities to

target his potential customers and also to maintain his existing client base.

c. Technical Skill

The third critical factor relates mostly to technical skills required especially for operating

computerized Wheel Alignment & Balancing machines and equipments. The machine operators

should be properly trained in order to completely inspect steering and suspension systems, take

computer measurements, make factory adjustments to restore alignment specifications. In case of

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unskilled workers handling these equipment, there will be loss of time, equipment and most

important of all unsatisfactory service leading to customer dissatisfaction.

Repairs and Servicing of two-wheelers

It is assumed that the two-wheelers coming into the workshop soliciting repairs and servicing

would subscribe to the following main services:

Maintenance Services which mostly constitute running repairs / services like Gear oil /

Engine Oil / Break Oil change, Oil Filter change, spark plugs / point repair, lubricant

replenishment / replacement, tuning, break shoe repairs, minor suspension repairs etc.

These maintenance services are usually characterized by their very little job turnaround

time and are usually disposed of within a half a day’s work.

Major Repairs mainly related to repair and replacement services that require

comparatively greater job turnaround time and include activities like engine overhaul (1

day), gearbox repair & replacement, suspension replacement (1 day) etc., denting of

collided vehicles (maximum 3 days).

High Pressure Cleaning and polishing mainly involves the cleaning of the outer body

of the vehicle through high pressure water spray which contains a vehicle body detergent

and then a little wax to smoothen the body paint.

Sublet Services

Sublet services are those ancillary services that are outsourced to other specialized workshops /

personnel that are not a part of the service mix offered by the Auto Repair workshop. These

sublet services include items like Machine Shop Items, Silencer Repairs, Shock-absorber

Repairs, Upholstery Items (seats, bumpers, plastic repairs etc.). These sublet services usually

form a part of the total job order of the Auto Repair Workshop and are usually a portion of the

lump sum amount charged to the customer by the Auto Repair Workshop.

Quality Specifications

In house detailed inspection for the serviced / repaired item is required before delivery of the

vehicle to the customer, as this is the main factor to attract and maintain a loyal customer base

through a customer-oriented focus on business rather than concentrating on volume and losing

old customers. All the workers at the workshop need to be trained and held responsible for

providing superior service and developing long lasting trust bond with the customers. This forms

the basic need in this industry, as trust and honesty reflects the image of the entity and its

integrity associated with repair and service facilities. This would help in maintaining a consistent

revenue base, to ensure stability of business on the long run.

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Pollution Control

No Special pollution control measures are needed for the servicing and repairing of vehicle,

however arrangement for proper ventilation should be ensured in the engine testing areas and

waste oils / fluids from the vehicles should be collected separately before sending to recycling /

treatment facility.

The Repairing/ Servicing Process of vehicles do not pose any problems for pollution hence there

is no need to install the pollution control equipments.

Energy Conservation

With the growing energy needs and shortage coupled with rising energy cost, a greater thrust in

energy efficiency in industrial sector has been given by the Govt. of India since 1980s. The

Energy Conservation Act, 2001 has been enacted on 18th Aug., 2001, which provides for

efficient use of energy, its conservation & capacity building of Bureau of Energy Efficiency

created under the Act.

Thus, general awareness is to be created for economic use of electricity at all points. Justifiable

use of the energy sources and timely checks of contact points will facilitate the smooth working

and energy saving.

The following steps may help for conservation of electrical energy:

i. Adoption of energy conserving technologies, Repairing/Servicing aids and testing

facilities.

ii. Efficient management of Repairing/ Servicing Process and systems, QC and testing

equipments for yielding maximum Energy Conservation.

iii. Optimum use of electrical energy for heating during usage of motors can be obtained by

using efficient temperature controlled equipments.

iv. Use of power factor correction capacities. Proper selection and layout of lighting system;

timely switching on-off of the lights; use of compact CFL or LED lamps wherever

possible etc.

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FINANCIALS

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REPAYMENT SCHEDULE AGAINST FINANCIAL ASSISTANCE

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SNAPS OF ASSETS FOR REFERENCE