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How To Get A Mahindra Car Dealership? Investment, Profit & Requirements

How To Get A Mahindra Car Dealership? Investment, Profit & Requirements

By Startup Authority

Mahindra & Mahindra is a huge name in the automobile sector in India as well as globally. This multinational automotive manufacturing corporation was established back in the year 1945 and has its headquarters based in Mumbai. Mahindra & Mahindra built its reputation for its aggressive marketing and advertising campaign as well as for its rugged and reliable vehicles. 

People who had started purchasing its vehicles were very much satisfied and being an Indian company it grasped the Indian market like no other.

However, it still faces tough competition from other Indian players as well as foreign players as well in the Indian market. The company made huge profits in the FY 2023 which was about INR 10,282 crore. This number was an increase of 56% from its previous year revenues.

Different Types Of Mahindra Dealership Stores

Mahindra & Mahindra is not just into the passenger vehicle manufacturing segment in India but it has several other types of vehicles under its manufacturing belt. The product line is also a huge one and therefore it gives aspiring entrepreneurs the option to choose the type of dealership that they want to opt for.

It is important to conduct a detailed study about each type of dealership of Mahindra so that you will know which segment has the highest demand and which one has the lowest. 

The different types of Mahindra dealership  stores are:

  • Personal dealership
  • Pickup dealership 
  • Personal and pickup dealership 
  • Authorized service station 

According to the official website of Mahindra dealership opportunity the above mentioned types of dealerships that an entrepreneur can opt for. Let us look at each of the dealerships in detail. 

Personal Dealership

The personal dealership depicts that entrepreneurs and partners wishing to open such a type of dealership will be responsible for only the passenger and commercial vehicles manufactured by the company. You will not be authorized to deal with any other type of vehicles in this type of dealership. 

Pickup Dealership

A pickup dealership is only for pickup trucks. In case you have decided to open this type of dealership then you will only deal with the pickup trucks that Mahindra & Mahindra manufactures. 

Personal and Pickup Dealership

This type of dealership is somewhat the hybrid model dealership where dealers can deal with customers about both passenger vehicles and pickup trucks. The space required for these kinds of dealerships is expected to be larger. 

Authorized Service Station

An authorized service station from Mahindra will be responsible for servicing up vehicles of passengers and pickup trucks. It is one of the kinds of stores that will be necessary for all Mahindra vehicle purchasers because they have to do servicing to their vehicle at least once in a year depending on the usage. 

Investment Required To Start A Mahindra Dealership

The investment required to start a Mahindra dealership (personal dealership) would require a huge amount. Apart from that there are some certain eligibility criteria that one needs to have so that they can easily open up a Mahindra dealership store.

Some of them are experience and knowledge of the interested dealer, investment and financial stability, and space and area for the dealership store. If all these things are in place then only you can opt for a Mahindra car dealership. 

Since the company is offering different kinds of dealerships the total investment and the area required would vary. So, we will be talking about the personal type of dealership where a dealer will be responsible for showcasing passenger vehicles for sale.

The total investment required to start a Mahindra dealership would be around INR 8 crore to INR 10 crore. This amount is calculated only if you are purchasing your own land. In case you have your land already then the total investment would be much less. Let us have a look at the total cost breakdown below:

  • For land - INR 50 to INR 80 lakhs 
  • Agency building cost - INR 25 to INR 30 lakhs
  • Security deposit - INR 20 to INR 30 lakhs 
  • For the purchase of stock - INR 3 crores to INR 5 crores
  • Staff salary INR 5 lakhs to INR 10 lakhs 
  • Total investment INR 8 crore to INR 10 crore  

Services Offered At A Mahindra dealership Store

A Mahindra dealership store will offer various kinds of services. For example if a consumer comes to your Mahindra store to purchase a particular spare part then you will be able to provide that and you can also offer them a general vehicle service as well.

This is generally the case for every Mahindra dealership where you can not only book or pre-order a particular vehicle but if you already have a car of the same brand then you can get it serviced as well. 

In case you are looking to purchase a second-hand car then too you can contact the dealership manager to get yourself the list of cars that are available for sale. This too is one of the services that most dealerships have started for their customers. So, if you wish to start a Mahindra dealership then you will be offering them not just new vehicles for booking but a whole range of other services included. 

Documents Required Before Starting A Mahindra Dealership

  • Personal documents (Aadhaar card, Voter ID)
  • Address proof documents (Electricity bill)
  • Bank details (canceled cheque, passbook, account details)
  • NOC 
  • GST Number 
  • Shop agreement 
  • Franchise agreement 
  • Trade license 
  • Trade certificate 
  • Passport size photographs 
  • Contact number 
  • Email ID 

Manpower Required To Run A Mahindra Dealership

Mahindra & Mahindra showrooms or dealerships are huge which is why there is a lot of manpower required to run a Mahindra dealership. There would be various different positions in a dealership that you would have to recruit and fill in.

For example, a couple of salesmen, one manager, staff for maintenance, service workers, mechanics, receptionist, and such. Depending on the size of business the number would vary but since car dealerships are large in size the total manpower required could be between 10-15 employees. 

Area Required To Start A Mahindra Dealership

As already mentioned earlier that any car dealership that you may have visited is structured on a huge floor area. Similar is the case with the Mahindra dealership as well. The total area required to open up a Mahindra dealership would be between 6000 sq ft to 10000 sq ft.

This is a huge space and this space will be crucial for keeping new cars for showcasing purposes. The parking space is included within this space required where you will also be keeping some new models and as well as keep some space for parking for consumers. 

The space inside the showroom should be spacious and must be easily able to fit in around 15 to 20 vehicles of the brand. Customers will be coming in and they will be looking at the cars that will be kept in the showroom as exhibition. You will also have to keep a separate space for servicing as well.

Many entrepreneurs will be wanting to keep both sales and service under one roof so that it becomes easier for customers. Let us have a look at the breakdown of the total space required to start a Mahindra dealership. 

  • 1000-1500 sq ft lounge for customer waiting area 
  • 2000-2500 sq ft for work area 
  • 1500-2000 sq ft for parking area 
  • 2000-3000 sq ft for showcasing cars of the company 

Average Profit Margin From Mahindra Dealership

The average profit margin for Mahindra dealership is between 4% to 5%. To be exact the profit margin on dealerships is around 3.75% for Mahindra dealerships. This is only for the vehicles that are sold and the sale of spare parts would be around 15-20%.

This margin is quite low as compared to international margins. However, you can contact the company personnel to get to know more details about the average profit margin that your dealership can earn after setting up the business. 

Is Mahindra Dealership Profitable? 

Mahindra is itself a famous car manufacturing brand in India. The company has been able to get a good grasp of the Indian market which is why it would be justified to say that a Mahindra dealership business can be a profitable business. But, it is facing tight competition from other players in the market. 

Is Mahindra Dealership a Good Option To Start a Business?

Now, the total investment required to start a Mahindra dealership is huge which is why most people with such investment will already look for different business ideas.

But, opening up a Mahindra dealership is a profitable business in India. This is because the company spends huge on its marketing and advertising campaign and has been able to get the attention of the crowd. 

How Many Mahindra outlet dealerships Are There In India?

There are around 1076 Mahindra car showrooms across 589 cities in India. This is a report that was revealed by the popular car purchasing website, cardekho. The numbers will be increasing in the upcoming years.