How and where to start an automotive business
The joke walking around the Internet that the richest people in the world are motorists, no matter how much you raise taxes, they will continue to drive as they drove, reflects the essence of the dependence of many people on which they spent and continue to spend the lion's share of their budget.
A car for a man is a special passion in life, a hobby, a means of transportation, an object of personal pride, and not rarely a source of income. The number of women getting behind the wheel is increasing every day. What unites all people who are ready to spend hours in a traffic jam is the need for convenience and comfort of movement in a private car, and they are ready to pay for this need constantly.
If you want to build a business in the automotive industry, then first you should choose a niche and assess the prospects for working in it.
What you need to know about the automotive business?
First, the automotive business is interesting not only for entrepreneurs, but also for the state. This path of income is a gold mine. Naturally, we need to prepare for the fact that business in this area is very cruel, and not only competitors, but also local controlling state structures will put a spoke in the wheel. You will not be able to bypass the registration of an individual entrepreneur, and every month, even from the smallest car wash, you will have to pay at least 6 thousand rubles in taxes, which is not a critical figure for the regions, but tangible.
Secondly, the automotive business is too broad a concept, it is difficult to cover it completely and at once. These are car dealerships, service centers, workshops, car washes, spare parts stores, and driving schools. Consulting in the field of auto and provision of various kinds of services, auto resale, etc.
At first glance, a person who has decided to plunge into the world of auto business, it seems that all niches are already occupied by large companies and there is nothing to catch. However, superficial judgment is easily dispelled by checking the niche you choose. It often happens that in the provinces there are not enough service centers specializing in the repair of some car brands, parts, alarm systems, there are no shops with the necessary spare parts.
Thirdly, the auto business requires substantial investments. If you are a beginner, it is unlikely that you have the amount of at least 20 million rubles to build or rent a car dealership, gain the trust of large dealers and get the connections necessary for business development. In addition, a car dealership pays off within five to seven years, during which more and more investments will have to be made in the business.
The way out is to choose a niche that does not require significant investments and allows you to start quickly without losing yourself when registering an individual entrepreneur.
Budget Automotive Business Ideas:
Business by car is a great activity for men. If you have a personal vehicle, you can engage in a private carriage. To get a larger number of customers, it is permissible to conclude an agreement with a dispatch service or even arrange a taxi. However, these are not all options for activities in the field of cars.
Features of the automotive business
Car business can be organized in different directions. The most popular options are:
- Service industry. This category includes vehicle rental, sale of all kinds of devices for cars. A popular option is a self-service car wash.
- Sale of spare parts for cars. You can also deal with the implementation of assistive devices.
- Transportation of groups of tourists. Moreover, you can use the car as an advertisement.
This is not a complete list of ideas for the auto business. A profitable direction will be the opening of a service station or tire fitting. In large cities, an exit car wash will be an interesting solution. In this case, cars are washed with a wet or dry method. This option helps to save time for car owners.
Important! To avoid troubles, when organizing a business, it is necessary to draw up all the necessary documents on time. In this case, you need to adhere to the legislation.
Popular Automotive Ideas with Various Investments
If you are planning an auto business, ideas can be very diverse. This allows you to choose the most appropriate option.
This car business idea is considered relatively new. Therefore, it needs to be well advertised. If you open such a company now, with competent management, after a while it will be possible to occupy a good niche on the market.
This line of business is the delivery of the owner's car to a specific location. For example, the service may be required if it is necessary to deliver a drunk person and his car home. This service even has a sonorous name "sober driver".
An important point in this case is the responsibility for the transported transport. Reliable firms sign a contract with the customer, according to which they take on obligations for the safety of the machine.
Pay attention! To minimize the risk, it is worth concluding a contract with an insurance company. She will set tariffs depending on the car class and route.
Car rental is a real business with a huge number of schemes for earning money. You can act as a lender as well as deal with daily and hourly rentals. You can become a mediator. Starting with the purchase of one rental car, you can gradually organize the operation of an entire fleet of vehicles.
Benefits of a Business Idea
We propose to consider the main benefits of such a business:
- No need for serious investments at the start. At the very beginning, you can limit yourself to buying an economy class car (Renault Logan, Lada Granta). In a relatively large city, this can bring in profit of 10-15 thousand per month. An option is also possible with minimal costs without the need to purchase a car - the provision of intermediary services. We will consider it separately.
- Business does not require much time. For daily rent, it is enough to come to the parking lot in the evening, pick up and drop the car. You don't have to be distracted from your main job or other business. It is good if the entrepreneur is already engaged in the auto business.
- Car rental does not require any special data, experience or skills. Any citizen can do it.
- Minimum personnel costs. At first, you can act independently, which cannot be said about most other types of auto business.
Target audience and vehicle options
First, let's figure out in what cases car rental is generally needed:
- Temporary absence of a car. It is important when a person cannot imagine life in a city without a car, and it is impossible to buy his own car urgently.
- Rest car. The idea of renting is popular in resort towns and everywhere tourists come to rest.
- Car for the holiday. Submitted to a separate category. Usually ordered for weddings, receptions, etc. Limousines and executive cars are ordered.
- Auto for visiting businessmen and dignitaries. They are usually not disregarded and ordered a car with a driver.
- Rent for taxi drivers. For those who work without their own car or do not want to use it for these purposes - this option may be optimal.
- Desire to get acquainted with a specific car before buying. You can arrange a full test drive for the future car owner.
So, your audience is ordinary car owners, tourists, businessmen, taxi drivers, private drivers. From organizations - private companies, holiday agencies, carriers.
What vehicles are required? Let's analyze:
- An inexpensive foreign car, for example, Kia Rio, is suitable for recreation. Hardly anyone will choose a domestic car.
- For taxis - from Lada Granta to Toyota Corolla and Huyndai, Kia - top models with an average configuration.
- For business - Toyota Camry, VW Passat, etc. Business class from Korean firms is also acceptable.
- For holidays - you need to have a limousine in the fleet.
- For exceptional cases and VIPs - Lexus, Jaguar, Chrysler, Mercedes.
How to start a business
Renting may seem like a simple scheme only at first glance. In fact, there are many options for earning money. You can:
- Provide only cars;
- Engage in passenger transport yourself;
- Hire drivers on a permanent basis or have a number of options upon request.
The situation in the Russian automotive market can be briefly described with the slang word "waste". The peak of the crisis, which came in mid-2021, has passed - it's time to move on. True, it is too early to talk about recovery. Monthly new car sales statistics for 2021 compared to 2021 still show an alarming -10%, -15%, -20% and so on, depending on the brand. But the sales of "secondary housing" are growing. In the summer of 2021, Za Rulem wrote about the unprecedented growth in sales of used cars in Russia - 11%! The potential impact is evident. Opening a used car dealer?
Despite the attractiveness of the idea, it has serious drawbacks:
- High competition, especially in large cities. And this means more promotion costs, more difficult to gain a foothold in the market and other related difficulties. It will be difficult for a beginner.
- Large start-up capital. It will not be possible to launch such a business with a million in your pocket (not to mention smaller amounts). A serious enterprise needs to rent a large space in a fairly passable (and therefore expensive) place, at least 5 million for the initial purchase of cars alone, a solid advertising budget. 10 million is the minimum for such a business.
- It's difficult to buy cars. Without any special problems, it will be possible to buy only junk, in the pre-sale preparation of which you will have to invest. The ability to "fish out" for a good cheap car will have to learn and organize the work of a whole department for the selection of a car. By the way, be prepared that car owners who put up a car for sale will not be happy with your calls, because they are sure that they will sell the car themselves.
If all this does not bother you, go ahead! Further - more interesting.
The sphere of services provided by enterprises selling used cars is quite wide. In addition to the car dealership itself, the company can also be a credit institution, have its own car service and legal department, and provide consulting services. In this regard, it is worth considering how to combine so many different OKVED within one business (restrictions are possible), or it will be easier to outsource some of the services offered. For example, to agree on cooperation with a local auto lawyer to check the legal cleanliness of a car or a car service to check the technical condition.
Let us list below the services that a typical car dealership offers to its customers:
- Urgent car purchase.
- Car sale.
- Trade-in system (the car owner gives off part of the purchase price for his car).
- Putting a car on a commission (an online commission option is possible: the car remains with the owner, you only get the opportunity to place its profile on your website).
- Checking the legal purity (the car is not listed in theft or pledged by a credit institution).
- Provision of a loan for the purchase of a car (you can use your resources or act as an intermediary between the buyer and the bank).
- Estimation of the value of the car (based on market analysis and the conclusion of a service specialist).
- Help in the selection and purchase of a car.
Note that this is the maximum package of services. In your region, some of the services from this list may not be available to competitors, and this can be made a competitive advantage and used in promotion.
Car rental is a viable business idea that can become a full-fledged source of income. But today's market is oversaturated. Therefore, in order to occupy a niche in 2021, it is necessary to enter the market by making a unique offer. Below are the options that are ideal for bringing this vision to fruition in 2021:
- TOP-5 new car models for rent.
- TOP-5 used cars, which are ideal for renting.
- Business and legal aspects.
- Tips, nuances, features of doing this business in 2021.
- Real-world examples.
This article will help you get the right idea about running this business. Here the reader will learn about the pitfalls that may await him at one stage or another.
What cars to buy for rent so that they bring real profit
Market research results show that user demand for car rental services has grown significantly over the past two years. Compared to 2021, demand in 2021 increased by almost 6% in Western countries, and by 11% in Asia. But in order to develop your business, you need to competently approach the choice of models that will be included in the car fleet. Otherwise, all financial investments will be meaningless.
TOP-new car models for rent
There is a rating of new cars that are in greatest demand in Russia. The list will list both the advantages of these vehicles and their disadvantages so that the reader can immediately understand what to expect from these brands:
- Hyundai Solaris is a subcompact car that is a localized version of the Hyundai Accent. Adapted for use in Russian conditions. A small-sized city sedan that uses little fuel, it has most of the modern conveniences found in premium cars. Drivers love this model for its convenience, unpretentiousness, economy and attractive appearance. Ideal for urban use, however, this vehicle may not be suitable for long journeys. Affects the low weight of the body - for driving on the track, this is not the most suitable model.
- Kia Rio is another small class model from another South Korean company. Has almost all the same characteristics as Hyundai Solaris. These are two competing models, they are similar in popularity to each other. Just like the Solaris, this car is ideal for urban driving, but it is not recommended for use on bad roads (despite its relatively high ground clearance and short wheelbase), and it is also not suitable for long journeys.
- Volkswagen Polo is another small car, this time from a German manufacturer. Volkswagen Polo has a rich history, this model was produced both in the form of a hatchback and in a sedan body, belongs to the same segment as the previous two. However, it is a little more whimsical compared to cars from South Korean manufacturers. Its cost is slightly higher than that of other models from this list, and in service it is much more expensive. This is due to the expensive service and high cost of original factory parts.
- Lada Granta is a popular model from a domestic manufacturer. This car received the title of the best-selling car (according to data for 2021) in the territory of the Russian Federation. He replaced LADA Samara. Available in sedan and liftback bodies. It has both a manual transmission and an automatic transmission. One of the most successful cars on the domestic market - it consumes little fuel, is unpretentious in operation, cheap maintenance, affordable parts, and a decent level of comfort. Together with the low rental cost, the popularity of this model has grown significantly.
- Renault Logan is a subcompact car from the French manufacturer Renault. The model was created specifically for emerging markets. Now the main production has been moved to the Dacia plant, which is owned by Renault and is located in Romania. Another unpretentious car that has a low cost and is ideal for urban use. Available in sedan, station wagon, minivan and pickup.
Maintenance costs of these vehicles are minimal. Tenants especially appreciate these models for their unpretentiousness, simplicity, convenience and economy. They are not suitable for off-road driving, so for these purposes you will have to consider models from other segments.
TOP-used cars that are ideal for renting