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Old 22nd June 2022, 18:49   #1
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Default How to do market analysis before opening a motorcycle dealership?

Hi guys, I had been planning to venture into Motorcycle Retail business since a long time and fortunately I am presented with a very luring opportunity. So, I plan to apply for a authorised dealership of a major motorcycle company in Gurugram district of Haryana, but with no prior experience in this field I want to do a thorough market analysis for the same and establish proposal metrics i.e, whether it would be a profitable venture for me.

So, please guide me in the method/ways that I should use for analysis and where to get the data from (like regarding motorcycle sales of my district for this particular brand).

Last edited by Axe77 : 23rd June 2022 at 09:06. Reason: Abbreviations
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Old 23rd June 2022, 07:43   #2
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Default Re: How to do market analysis before opening a motorcycle dealership?

Quote:
Originally Posted by Chandrahas View Post
but with no prior experience in this field
The best analysis & research you can do is this = get a job in an existing motorcycle dealership. Trust me, even working for 2 years in the same business will be like an "MBA" in the dealership business (if not PhD). It is an extremely capital-intensive & labour-intensive business, with many challenges in terms of logistics, marketing etc.

Also read these threads on dealerships:

Financials (Financials (income, expenses & margins) of car dealerships in India)

Cost (How much does it cost to set up a car dealership in India?)

Don't open a dealership with zero experience. It'll be like flying a plane without going to flight school. Again, working in a dealership will give you invaluable experience & knowledge, and probably save you lakhs / crores of rupees.

Quote:
where to get the data from (like regarding motorcycle sales of my district for this particular brand).
The brand itself will provide this data to you.
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Old 27th June 2022, 14:40   #3
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Default Re: How to do market analysis before opening a motorcycle dealership?

Dude, that's a fantastic opportunity but without prior experience, you will burn your fingers many times before getting it right. My suggestion would be to get a job in a dealership and work there for at least 1 year. You will gain a treasure trove of experience. Once you set up your shop, trust me, you will find it like a walk in the park. Small things such a loading deck height to set the ramp also play a crucial role in managing dealerships.
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Old 27th June 2022, 17:19   #4
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Default Re: How to do market analysis before opening a motorcycle dealership?

It is actually very simple. You have various ways as mentioned below-

Option-1

Just try to find the number of two-wheelers being sold monthly in your town/area (Can be sourced from local RTO). Say there are 100 units being sold by all manufacturers. Find the market share of the proposed brand that you have been mulling. You'll get your number plus minus 20% depending on your sales team performance / marketing / location.

Option-2

Try to get in touch with a staff of any top three dealership in your area. They will tell you the numbers they are doing monthly. Trust me, it is not at all difficult to get the numbers.


Now that you have the monthly numbers, apply the below formula-

Avg Ticket size (Say 80K Inr) X No of units (Say 100 nos) = 80 Lacs (Your Monthly Sales)

The industry margins are anywhere between 3-5% for volume driven brands.

Therefore, 80 Lacs X 4% = 3.2 Lacs Gross Margin per month minus expense, interest, salaries, taxes etc.

Therefore, Gross Margin - Expenses = Net Profit.

It is a simple business to run and not as complicated as some people are telling here.

You just need a general sense of understanding operations and finances.
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Old 2nd July 2022, 22:17   #5
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Default Re: How to do market analysis before opening a motorcycle dealership?

Thanks for the advice guys, I have decided to take the plunge and set-up the dealership.
I would have loved to join a dealership, work there and gain some experience but the problem is - I can't get a dealership whenever I want i.e, forget about getting, I can't even apply for one if there is no vacancy in the area. Moreover, all the established players already have their dealers in the NCR area, so I don't think I'll get this opportunity again at a later stage.
The previous dealer is giving up the area only because of a feud amongst the partners.
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