End-to-end services and repairs network Autorounders promises top-notch car seva
With more than 25 million cars sold since 2005, the timing is right for Autorounders to drive into the services market. The multi-brand car services network offers comprehensive post-sales assistance, including regular maintenance, car spa, denting and painting, repairs and PUC checks.
Himanshu Mehta, a businessman, owns a VW Passat and keeps having trouble with its air conditioner. Regular trips to the workshop haven’t helped and the car’s AC fails every three months.
That’s when he lands on the Autorounders’ website and books an appointment with a mechanic. After a check, the mechanic proposes changing the air compressor. Himanshu has already spent a lot on servicing his car and agrees; he has nothing to lose. The car returns from the workshop with a new air compressor. The AC has been functioning perfectly for over a year now.
Mumbai-based automotive service startup Autorounders is helping streamline the disorganised automobile service centres in India. It has over 22 centres in Mumbai alone and plans to grow its network to over 40 centres by the end of the year.
Founders Satish Mandalia and Dhaval Mehta learnt the tricks of the trade from a master teacher; they were students of Kishore Biyani in a school called Future Group. It was when they were working at the Rs 13,000-crore retailer that they built the muscle to start Autorounders in April 2016.
Working in Future Group for 11 years is an experience like no other. You begin with operations and slowly begin to unravel the complexities of sourcing and supply chain. Once that is done, you are thrown into the deep end of understanding customer psychology and shopping behaviour.
The founders put all these learnings to use when they started up.
“When we began the company we were very clear about understanding problems in the industry and addressing them by providing price transparency through a platform,” Satish says.
Gaining trust by providing transparency
The USP of Autorounders is based on maintaining complete transparency by offering upfront costs, including complete break-up of parts, consumables and labour.
Satish says most times, details of pricing are not shared properly when the car goes for servicing. Different dealerships, authorised service centres and independent mechanics have different rates for the same job.
Autorounders decided to round up the disorganised but efficient service men to be part of their banner, promising an increase in the number of cars that came in for body work and servicing.
In a year, the company helped 22 service centres, branded Autorounders, access more than 2,200 regular customers.
“We have gone through Mumbai slowly and have made sure services are consistent with our service-level agreements,” Satish says.
The “independent post warranty car service” is highly underserviced, unorganised and unreliable. At one end of the spectrum, there are low-cost garages with little or no credibility; at the other, there are good quality but expensive dealership service centres.
Autorounders aims to bring the best of both worlds together by providing assured, cost-effective and high-quality service. The company’s website lets customers list their requirements and get a detailed cost estimate, helping them to compare costs and decide. The seamless payment options on the app and website makes it easy for customers to set up service appointments.
Using data to drive business
Autorounders’ business model is simple: they take a small percentage of the sales. Today, its revenues are Rs 50 lakh and likely to double in six months.
The company recently took in a new co-founder, Priyank Mazumdar, to build data on how customers are using their cars and various issues addressed by the company.
In the future, Autorounders is keen to become a data-driven company, one that can anticipate repairs work, share this information with customers and be a one-stop shop for auto care.
The founders hope the company becomes an extension of every automobile brand for service. There are more than 5,000 dealerships in the country for the top 10 automakers.
The opportunities are endless because annually more than three million cars sell in India, and every owner is looking for an alternative to the dealership service.
Sandeep Begur, Co-founder of Koovers, says: “The main challenge for brands is to ensure that the large OEMs support an independent network of mechanics. Today, dealerships are de facto asked to service cars sold through their network because of the guaranteed service-based business model followed in the automotive industry with dealers.”
Depending on the brand, the commission on cars sold is less than 2.5 percent; the dealer only makes money when the cars come back for service. The margins on the service, through parts replacement and tune-ups, can be more than 100 percent of the intended cost minus the cost of labour. The spare parts are marked up to recover the high cost of rentals and corporate expenses.
More than 60 percent car owners drop OEM service after the warranty period is over. This is where brands like Autorounders want to ensure premium service.
The market and other players
Autoyaar and Mericar are aggregating service providers, and focusing on providing technology for discoverability. However, they have little or no control on quality, consistency and predictability of service. Companies like Cartisan provide services through their own mechanics, technicians, advisors, electricians and workshops. They are one of the largest service providers in the market today.
Other automotive industry players are also trying to create their own branded chains, but are grappling with scalability and cost issues. Hyderabad-based Carz scaled up with exclusive multi-brand service, but struggled with the inventory model when it came to spares.
But the opportunity remains massive with over 25 million cars sold since 2005. In the coming years, this number is expected to double. According to CII-ACMA, the automotive after-sales servicing business in India is pegged at nearly $2 billion (excluding spare parts) in 2015.
Satish believes that in a couple of years the business will be profitable and the profits will be enough to expand to new regions.
Autorounders plans to expand to markets like Surat and Raipur where people own high-end cars but need to send them to metros for tinkering and fine tuning.
“We have a long-term vision to build this company and we can build it with our own funds, although we are not shy of talking to funds with synergies,” he says.
Together, the three partners are all set to put Autorounders on the road to success.