The Current And Futuristic Trend In Automobile Servicing

Amit Bhasin, Co-Founder, Go MechanicGoMechanic is a consistent, reliable and hassle-free car care solution for customers. Transparent pricing, reliable service and proprietary customer dashboard for seamless customer experience.

The Indian automobile industry stands one of the largest across the globe, contributing more than 7% to India’s GDP. This highly competitive auto sector set in motion an equally aggressive automotive servicing and repair industry which is estimated to be worth Rs. 34,000 crore by the year 2020. Moreover, the rapidly growing presence and the arrival of big car brands in the country is driving the Indian car market towards becoming a world leader in the coming years.

The car service industry in India | In a nutshell
The Indian car service industry can be segregated into three individual sectors;

1. Authorised Service Centers :
There are authorised service centres which are, as the name suggests “authorised” workshops which take care of service and maintenance for a specific car brand operating as company-owned or a franchisee. This sector rakes in approximately 45% of all the revenue generated in this domain. The explanation lies within the warranty clause set by the manufacturer which restricts the consumer to avail services tendered only by the authorised service centre. That’s not all, car manufacturers also specify periodic services and replacements which the user can only find at authorised workshops.

2. Unorganised Service Centers:
Unorganised local garages find their existence as the cheapest automobile service provider in this vertical. Commonly referred to as a local garage, these are basically unorganised, scantly-equipped, and low overhead, and bare-minimum workshops usually operating as individually-held establishments. However, this unstructured sector gets a major chunk of the revenue pie. The business majorly comes from customers with out-of-warranty or second-hand cars looking to save some pennies on car maintenance.

3. Multi-Brand Car Service Centers:
Then comes the multi-brand car service centres that provide services, spares and support for a huge assortment of car brands. The
genesis of the multi-brand industry stemmed from the post-warranty car service crisis where 65% of car users with out-of-warranty cars closed their relationship with authorised service centres in search of an affordable and flexible alternative. The organised multi-brand car service centres found its sweet spot sitting conveniently between expensive authorised centres and unreliable local garages.

What car servicing used to be?
In the era before the arrival of multi-brand service centres in India, a car owner essentially had two options to choose from for their car service; either go for the company-specified (mandated!) service centre or drive into a local garage near them. A company authorised service centre meant, peace of mind, quality service, genuine parts, and transparency. On the downside, the cost of maintaining a car surged dramatically with forced replacements and inflated bills that burnt a hole in the pocket.

The rapidly growing presence and the arrival of big car brands in the country are driving the Indian car market towards becoming a world leader in the coming years

The local garage, on the other hand, might address the “inflated bill” issue but at a cost that would dwarf the actual concern. These unorganised local garages function on an infinitesimal budget with an objective to keep the operational cost low. With inadequate tools and equipment, no supply chain of spare parts and shady practices, local garages tend to drive away car users who are looking for good quality and affordable car service.

The advent of multi-brand car service centres
The equation is simple, there are approximately 60 million cars plying on Indian roads. This has resulted in an overwhelming demand for after-sales service and repairs which has broken the shell for numerous after-sales car service businesses (other than authorised service centres) that are ready to provide an alternative solution to car servicing and maintenance.

Enter multi-brand car service centres
Multi-brand car workshops operate in an organised capacity similar to authorised service centres. These workshops offer industry-standard car services utilising equipment, tools and machinery that are at par with the manufacturer set minimum OEM recommendations. Multi-brands promise to offer the same car service experience, the same authenticity, and the same service standard but at a cost which is up to 40% less than authorised service centres.

The cost factor along with quality assurance is what pulls the average car consumer from authorised dealerships to multi-brand car service centres. In fact, market data suggests that only 35% of all “post-warranty cars” head back to a company authorised service centres. The rest 65%, go to multi-brand car service centres.

Even car insurance companies love multi-brand centres as they provide OEM-quality repairs at a cost way less than authorised dealerships. Moreover, the “Repair-over-Replace” policy helps insurance companies keep their loss ratio in check, which is why you can now find cashless claim facility at multi-brand workshops. The future holds great promise for multi-brand car service centres which is witnessing a dramatic increase in popularity and acceptance, especially among Millennials. Data analysts predict a growth of 1% to 8% by the year 2020 for the multi-brand car service sector in India.