How to Start TVS Dealership | Cost, Fees, and 10% Profit Margin

Introduction

Starting a TVS dealership in India can be an exciting and rewarding venture for individuals interested in the automotive industry. TVS Motor Company, a leading two-wheeler manufacturer in India, offers a great opportunity to become a part of their esteemed dealership network. In this article, we will delve into the business model and provide a step-by-step application process, along with a breakdown of the costs and fees involved, insights on profit margins, and a balanced look at the pros and cons of starting a TVS dealership in India.

Business Model of TVS Dealership

TVS Motor Company operates on a dealership model in India. As a TVS dealer, you will have the privilege of promoting and selling their extensive range of two-wheelers, including motorcycles, scooters, and mopeds. TVS has a strong presence across the country, ensuring a wide customer base and ample business opportunities for its dealers.

How to apply: step-by-step application process

To begin your journey as a TVS dealer, follow these steps:

Research and Analysis: Conduct thorough research about TVS Motor Company, their products, market presence, and customer demand in your target location. Analyze potential competition and make informed decisions.

Contact TVS Motor: Reach out to TVS Motor Company through their official website or contact their regional office. Express your interest in becoming a TVS dealer and request detailed information about the application process.

Initial Meeting and Documentation: Once you establish contact with TVS Motor, they will schedule an initial meeting to assess your suitability as a dealer. During this stage, prepare necessary documents such as identity proof, address proof, financial statements, and any other requested information.

Site Inspection and Verification: TVS Motor will conduct a site inspection to evaluate the location where you plan to set up the dealership. They will verify factors like accessibility, infrastructure, visibility, and feasibility for showcasing their products.

Financial Assessment: As part of the application process, TVS Motor will assess your financial capability to invest in and sustain the dealership. They may request bank statements, proof of funds, and financial projections.

Training and Evaluation: If your application progresses to this stage, TVS Motor will provide you with training on their products, sales techniques, customer service, and dealership operations. After the training, they will evaluate your understanding and commitment to the TVS brand.

Confirmation and Agreement Signing: Upon successful completion of the evaluation, you will receive confirmation of your becoming a TVS dealer. At this stage, you will sign a dealership agreement outlining the terms and conditions of the partnership.

Cost and Fees

While the cost of starting a TVS dealership may vary depending on factors like location, size, and infrastructure, here is a general breakdown of the expenses involved:

Infrastructure Investment: The cost of setting up a showroom and service center is a significant portion of the initial investment. This includes expenses such as renting or purchasing the property, interior design, furnishings, signage, and display units.

Inventory Costs: As a TVS dealer, you will need to maintain an inventory of motorcycles, scooters, and spare parts. The cost of purchasing this initial stock can vary based on the range and quantity of products you choose to stock.

Working Capital: It is essential to have sufficient working capital to handle day-to-day operational expenses such as salaries, utilities, marketing, and vehicle maintenance.

Marketing and Promotional Expenses: Promoting your dealership and attracting customers require effective marketing strategies. Allocate a budget for advertising, online presence, local promotions, and customer outreach programs.

Training and Recruitment: Consider the expenses associated with training your staff, both sales and service, along with their salaries and benefits.

Investment Component Estimated Cost
Franchise fee INR 10 lakhs
Infrastructure investment INR 20-30 lakhs
Inventory INR 15-20 lakhs
Staff salaries INR 1-2 lakhs per year
Insurance, utilities, and other overhead expenses INR 1 lakh per year
Total cost INR 50-60 lakhs

Area Requirement:

  • Showroom Frontage – 15 – 18mts.
  • Showroom area – 167 – 222 sq.mts.
  • Workshop area -232 – 278 sq.mts.
  • Spare parts area – 37 – 56 sq.mts.
  • Adequate storage space.
  • Applicants with own premises preferred.

It is crucial to consult with TVS Motor Company or their designated representatives to get a precise estimation of the investment required for starting a TVS dealership in your specific location.

Profit Margin

Profit margins in a TVS dealership can vary depending on multiple factors, such as market demand, competition, operational efficiency, and sales volume. While it is challenging to provide an exact figure, a well-planned and efficiently managed dealership can yield a profit margin ranging from 6% to 10%. Additionally, offering various value-added services, having a quick turnaround time for service requests, and maintaining strong customer relationships can positively impact profit margins.

Also Read: How to Get Ultratech Cement Dealership | Cost, Fee, and 10% Profit Margin

Pros and Cons

As with any business venture, starting a TVS dealership in India comes with its own set of advantages and challenges. Let’s take a look at the pros and cons:

Pros:

  • Established Brand: TVS Motor Company is a well-known and respected brand in India, which can enhance the credibility and trustworthiness of your dealership.
  • Product Range: The diverse range of TVS two-wheelers caters to a wide customer base, allowing you to tap into various market segments and preferences.
  • Marketing and Support: TVS Motor offers marketing support, promotional materials, and training to help you effectively promote and sell their products.
  • Growing Market: The Indian automotive market continues to witness steady growth, providing ample opportunities for the expansion of your dealership.

Cons:

  • Initial Investment: The cost of starting a TVS dealership can be significant, requiring a considerable upfront investment.
  • Competition: The two-wheeler market in India is highly competitive, and there may be other well-established dealerships in your area, posing challenges to capturing a significant market share.
  • Operational Challenges: Running a dealership involves managing inventory, service center operations, and ensuring customer satisfaction, which can be demanding and require continuous efforts.

Conclusion

Starting a TVS dealership in India can be a rewarding venture for individuals passionate about the automotive industry. Through a step-by-step application process, a comprehensive financial assessment, and training by TVS Motor Company, you can establish a successful partnership with a renowned brand. While the initial investment can be substantial, diligent planning, effective marketing, and providing exceptional customer service can lead to profitable business operations.

F.A.Q

Can I start a TVS dealership with a small budget?

The investment required for starting a TVS dealership varies based on factors like location and size. It is recommended to consult with TVS Motor Company to determine the feasibility of starting a dealership within your budget.

What ongoing support can I expect from TVS Motor Company?

TVS Motor provides ongoing support in terms of marketing, product training, after-sales service, and technical assistance to ensure the success of its dealerships.

Do I need prior experience in the automotive industry to start a TVS dealership?

While prior experience can be an advantage, it is not mandatory. TVS Motor Company provides training and support to equip you with the necessary skills and knowledge to run a successful dealership.

How long does the application process usually take?

The application process's duration can vary depending on various factors. It is recommended to maintain regular communication with TVS Motor Company to stay updated on the progress of your application.

Leave a comment