Starting a Mahindra First Choice Franchise
Starting a Mahindra First Choice Franchise
Mahindra First Choice is India’s largest used car mart with 500+ outlets in 270+ cities in India. Founded in 1945 as a steel trading company, Mahindra First Choice is a part of the Mahindra Conglomerate with a group annual sales turnover of over US $16.5 billion with more than 180,000 employees in over 100 countries across the globe. Through Mahindra First Choice, the Group plans to plans to establish over 1800 Mahindra First Choice outlets across India to offer customers a wide range of certified used cars. In this article, we look at the process of starting a Mahindra First Choice Franchise.
Auto Industry in India
India has one of the world’s largest automobile industry and automobile market. The used car market in India is estimated to be 1.3 times the size of the new car market at nearly 2 million units and is estimated to increase to 3 million units in 2015. Rising middle-class income and easy availability of loans will ensure that the new and used automobile industry in India keeps growing at an above-average pace. In addition, the penetration of new or used auto sales stores in tier 2 and tier 3 cities is minimal – leaving a large space for small Entrepreneurs to establish a successful business.
Mahindra First Choice Franchise Options
Mahindra First Choice offers franchise opportunities in two modes for those wishing to establish a business in the auto industry. Mahindra First Choice Wheels and Mahindra First Choice Services.
Mahindra First Choice Wheels
Mahindra First Choice Wheels offers is India’s largest used car mart wherein you can either buy a used car of any brand with a best-in-class warranty or sell your used car of any brand and get paid in 48 hours.
Mahindra First Choice Services
Mahindra First Choice Services (MFCS) is a wholly-owned subsidiary of Mahindra Group and is a chain of multi-brand service centre located across India.
Eligibility for Mahindra First Choice Franchise
Office space of about 500 – 1000 square feet with parking for about 15-20 cars and working capital of Rs.20 to Rs.50 lakhs is required for establishing a Mahindra First Choice franchise. In addition to the above requirement, the following are other requirements based on the business entity with which franchise agreement would be entered:
Franchise Requirements for Salaried Applicants
- Minimum age of applicant: 21 years.
- Maximum age of applicant at loan maturity: 60 years.
- Minimum employment: Should be currently employed for a minimum period of 1 year and have been employed for a minimum of 2 years.
- Gross household income i.e. including income of the spouse should be more than Rs 100000 net annual income.
- Telephone: Necessary at residence.
Eligibility for Self Employed Individuals
- Minimum age of applicant: 21 years.
- Maximum age of applicant at loan maturity: 65 years.
- Minimum employment: At least 3 years in business.
- Minimum annual income: 60000.
Eligibility for Partnership Firms
- Minimum income: Rs. 60000 p. a.
- Minimum turnover: Turnover Rs 4.5 lacs.
- Telephone: Landline number required at the office and at the residence of the loan applying partner.
- Post-paid mobile phone with a three month validity period is acceptable in case a landline is available only at one place.
Eligibility for Private Limited / Public Limited Company
- Minimum income: Rs. 60000 p.a.
- Telephone: Landline at the office.
Mahindra First Choice Franchise Advantages
Starting a Mahindra First Choice Franchise has various advantages when compared to starting a standalone used car dealership or service centre. The biggest advantage being that of the trust and confidence the Mahindra brand instils in the minds of customers. In addition to the backing of the Mahindra brand, the following are other advantages of starting a Mahindra First Choice Franchise:
Setting up of the Franchise
By starting a Mahindra First Choice Wheels stores, the store design, process and training are done as per a Mahindra designed process to ensure quality and consistency. The following training and support are provided to all franchise:
- The store layout, interiors, furniture etc.
- Car evaluation and procurement process
- The payment process for cars being procured
- Car refurbishment process
- Payment collection for cars being sold
- Sale Agreement with customers
- Transfer of car documentation
- Management of all dealership staff
- Overall management of the store
In addition to the above, the employees working at the Mahindra First Choice Franchise are also trained by the Franchisor on the following:
- Greeting and welcoming the customer
- Understanding customer requirements
- Helping our customer shortlist cars suiting his / her requirements
- Method of giving test-drives
- Recording customer enquiries into the system
- Smooth delivery of cars
- Giving feedback to seniors to help better prepare selling index
- Organizing an effective car display at the store
- Organizing an effective car display at an outside event
- Selling additional products like car finance, insurance, accessories, extended warranty etc.
- Maintaining a relationship with the customer after the car delivery
- Getting references to other prospects from existing customers
Finally, to ensure the franchisee is successful, training on procurement and sales of the car is provided to the relevant personnel:
- Understanding the demand/ supply situation in used cars
- Calculation of used car buying prices
- Technical check of the car based on checklist/evaluation form
- Calculating ‘projected refurbishment expenses’
- Checking the car documents
- Calculating the procurement price
- Explaining price calculation to sellers
- Negotiating price with sellers
- Rules pertaining to the transfer of insurance and NCB
- Rules pertaining to city-wise octroi/entry tax
- Calculation of process of cars registered outside the state
- Preparation of selling index and buying index
- Understanding the loan foreclosure process
- Collecting market intelligence and reporting the same to seniors
- New car dealerships and local procurement panel development
- Approaching corporates for car procurement
- Complete understanding of auctions relating to disposal of repossessed cars by banks / NBFC’s
- Building a relationship for obtaining the right kind of repossessed cars
- On ground activations for car buying/selling
For more information or help starting a Mahindra First Choice Franchise, talk to an IndiaFilings Business Advisor.
