Re: Cost of opening a Car/Bike dealership in India
First of all, starting off a showroom is not that easy. You need to send your whole profile to the manufacturer, whether you have any experience, whether you would be able to give good customer service, whether you have the necessary funds, whether the plot you have selected is in a good location of the city (also the manufacturer wont allow 2 dealers very near to each other), what will be your sales projection and how you plan to sell many cars, etc.
Then, it depends on the city. In a metropolitan city like Mumbai, Delhi, Bangalore, etc. where land is very very expensive, it would be a huge investment as a showroom with service centre needs a lot of space. So, if space or budget is at a premium, its better off to start with a bike showroom.
After everything is setup, I mean the building, you need to buy equipments for the service centre, which itself is quite costly. Every manufacturer has these pre-requisites that it's service centres should have all these minimum facilities, that you need to obey.
Even the showroom needs to be designed the way the manufacturer wants, they have a fixed format/layout for every showroom, which you need to keep in mind.
After everything is done, you need to buy test drive cars. Again manufacturers have a condition that you are supposed to buy and register test drive cars of every model and if possible all variants. But dealers normally buy only the top end.
Finally, it is the dealer's responsibility to sell cars, not the manufacturer's. So if a dealer is not able to sell cars and is going in a loss, then the manufacturer wont help him financially.
PLEASE NOTE THAT a dealer makes more money in servicing and repairing cars rather than selling cars. He charges insane amount of labour charges which totally goes into his pocket. Of course, he gets a small margin on spares also. All these money he gets is much more than the margin he gets on selling new cars. Hence, a car showroom is more profitable than a bike showroom, as bikers rarely bring their bikes to the A.S.S. for servicing and repairs. Of course the downside is that, car showrooms require huge initial investment when compared to bike showrooms.
Finally, a manufacturer also has the rights to cancel a dealer's license if they are getting too many complaints or negative reviews about the dealer, from their customers.