Pune, July 12, 2013: Mahindra First Choice Services (MFCS), which currently has 15 company-owned multi-brand car workshops across India, is planning to set up nearly 45-50 such centres by the end of 2013-14. Of these, 30 are expected to be company-owned outlets while the remaining would be the franchise service centres. However, MFCS sees a spurt in the number of franchise outlets and estimates that in the coming 3-4 years, the firm would be able to set up a chain of nearly 400 such outlets along with nearly 50 company-owned centres. On an average, a single workshop employs around 25 skilled workers while a company takes between 3-4 months to set up a franchise outlet including the training of workers.
The wholly owned subsidiary of Mahindra & Mahindra, which was set up in 2008, has identified three primary clusters where the firm plans to set up multiple such workshops in the near future. “We will follow a cluster-approach depending upon the demand in the market and cark park numbers. We have identified Delhi NCR, Pune and Chennai regions as the first three areas where our customers can expect us to have our network in place,” said Rajeev Dubey, president (group HR, corporate services & aftermarket), M&M. With two such centres at present in Pune, the company will add two more by December 2013. According to company officials, setting up an equipped First Choice service outlet costs Rs 1.5 crore for a brownfield project while nearly Rs 1.75 crore for a greenfield project.
Explaining why it took four years to the company to roll out a clear path for itself, Dubey clarified that “We did not want to start running until we were very sure that our operating practices have reached a level of excellence where we can provide a customer with very high degree of quality and reliability. Figuring out factors like spares management system, kind of skills required in servicing multi-brand cars (not easily available in the market), number of bays we should have, configuration of the bay, kind of equipment that can handle a multi-brand service outlet, kind of services which can come under our umbrella and many others take some time. This is a new industry in India. There were no benchmarks for us and we had to create benchmarks for ourselves and it took four years to put things rightly in place. Be it a franchise or a company-owned outlet, our customer would not be able to differentiate between the two. However, our own outlets would be the experimental ground for us in terms of new services, new equipment installations and others.”
According to Dubey, the firm is expecting to receive close to 100,000 orders during the ongoing financial year and nearly 30,00,000 repair orders after five years. Talking to Autocar Professional on the sidelines of the inauguration of the second Mahindra First Choice Service workshop in Pune yesterday, Dubey highlighted that “the unique thing about this outlet is the Insta Serve which is a combination of multiple services ranging from diagnostics, washing, wheel alignment, painting, and other services is for the first time is being rolled out. We are not here to destroy the prospects of the roadside mechanics but we look forward to service those who prefer to be provided with all services under one roof and have less time to spare. We see multi-brand car workshops to play a big role in the future and we hope to lead the same.” The new workshop is spread over 20,000 square feet with 16 bays and can service over 1,000 cars in a month.
Talking about the synergies with the sister company, Mahindra First Choice Wheels (MFCW), Dubey said that “we have synergies between the two entities in terms of branding, customers, manpower (managerial level), products (warranties, schemes) and channel (footprints).” He further told that “we are not witnessing any slowdown in the market, neither in the MFCW nor in MFCS, may be because we are too small. In fact, we are growing humongously. Our expansion plans for MFCS are a clear indication of how market is responding to us. MFCW is also growing at 35-40 percent per annum. We clearly are not suffering from the slowdown. There is a theory which says that the used car market is anti-cyclical compared to the new car market.”
The company official estimates that the organised used car market (fastest growing category) is hardly 17 percent while 60 percent is customer-to-customer and remaining 23 percent is via brokers.
AMIT PANDAY
Photograph: Rajeev Dubey, president (group HR, corporate services & aftermarket), M&M.