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Setting up a motorcycle dealership

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  • Setting up a motorcycle dealership

    Dear Fellow Xbhpians

    I am not to sure if this is the best place for this query.

    I have a friend who is looking at setting up a motorcycle dealership (KTM MUMBAI/BENELLI Nasik)

    a) What are the things that the big 2 wheeler manufacturers like Benelli and Bajaj look for while granting a dealership?

    b) Approximately what is the space requirements for a full Sales, Services and Spares kind of dealership?

    c) What kind of management is required for operating such a dealership?

    d) Expenses in terms of staff, facilities, inventory, working capital can be expected?

    e) What documentation is required before approaching the big manufacturers?

    f) How does one go about getting the following information from the manufacturers in terms of setting up the dealership?

    - Cost of the project
    - financing available from the banks
    - return on investments available in the two wheeler industry

    g) From an industry standpoint, If I would like to evaluate the attractiveness of the industry from margins ( dealership), profitability, capital required, where can i get these.

  • #2
    Re: Setting up a motorcycle dealership

    Topic Approved
    Biking is not about what you have between your legs, its all about how well you use it!!!!!!!

    Give your details here if you want to help your fellow xBhpian stranded in your city

    Touring Blog: Cycling in Mongolia!

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    • #3
      Re: Setting up a motorcycle dealership

      Dude the best answers to your questions like infrastructure requirements can only be answered by the company you want the dealership of. DSK Benelli has a page on their website called 'partner with us' . there they mention quite a bit of detail.

      As for the margins, you have to keep on mind this isn't a volumetric business when you compare to commuter segment business. I assume margins are high but due to lack of volume, earnings are not always high enough to make ends meet

      As far as documentation, i could assume them requiring you to have a registered company before hand .

      I'd say ask the company .
      Being on two wheels is being liberated. The vastness one feels being under the open sky. The whole feeling. . . cant be described.

      Ride safe, Ride long.

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      • #4
        Re: Setting up a motorcycle dealership

        Have 2 close people i know, who own a Hyundai and Yamaha dealership so I am giving up a vague idea to you. my response in bold.

        Originally posted by vernon24 View Post
        Dear Fellow Xbhpians

        I am not to sure if this is the best place for this query.

        I have a friend who is looking at setting up a motorcycle dealership (KTM MUMBAI/BENELLI Nasik)

        a) What are the things that the big 2 wheeler manufacturers like Benelli and Bajaj look for while granting a dealership?

        Many things such as retail space, your past/current business history and background (very imp. thing for the company), city and location you want to open the dealership in, your investment potential etc etc

        b) Approximately what is the space requirements for a full Sales, Services and Spares kind of dealership?

        Anything between 800 sqft to 3000+ depending upon the company. (ex: Vespa will be ok with small space, where as Honda and Hero would like you to have a considerable amount of space. There is no fixed rule and the final call is by the manufacturer on retail space.

        c) What kind of management is required for operating such a dealership?

        I didn't get this point.

        d) Expenses in terms of staff, facilities, inventory, working capital can be expected?

        Your biggest expenditure would be in staff monthly salary and invertory keep up.

        e) What documentation is required before approaching the big manufacturers?

        No one here can tell you that. Contact the particular manufacturer you wish to partner with.

        f) How does one go about getting the following information from the manufacturers in terms of setting up the dealership?

        - Cost of the project

        Expect between 1 crore - 5 crores in urban area. You are required to buy and keep advance stock of fixed number of bike units from the company in your warehouse.

        - financing available from the banks

        Don't know the full details but for that much amount, you would be eligible for a business loan against your real state property/properties.

        - return on investments available in the two wheeler industry

        g) From an industry standpoint, If I would like to evaluate the attractiveness of the industry from margins ( dealership), profitability, capital required, where can i get these.

        No dealership makes huge money by selling bikes (or for that matter cars as well). The margin is too low even for a Hero dealer selling hundreds of bikes in one day. The real profit of this business lies in the service centre, charging for labour and parts. You can expect to reach break even in 3-7 years depending upon the growth rate.
        All the best
        www.motorcykle.in - The lighter side of motorcycling

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        • #5
          Re: Setting up a motorcycle dealership

          Originally posted by UnsettledNose73 View Post
          Dude the best answers to your questions like infrastructure requirements can only be answered by the company you want the dealership of. DSK Benelli has a page on their website called 'partner with us' . there they mention quite a bit of detail.

          As for the margins, you have to keep on mind this isn't a volumetric business when you compare to commuter segment business. I assume margins are high but due to lack of volume, earnings are not always high enough to make ends meet

          As far as documentation, i could assume them requiring you to have a registered company before hand .

          I'd say ask the company .
          thanks !

          we have contacted a company to see what their requirements are lets see how it goes

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