5 Ways Startups are Disrupting the Indian Car Servicing Industry Make no mistake - the market is huge. Industry estimates peg the Indian car servicing industry anywhere between 20,000 to 30,000 Crore annually (USD 3 to 4 Billion)
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It was in December 1983, with the launch of the Maruti 800, that India's love affair with Authorised Service Centers (ASC's) began. Up until then, Ambassadors and the Padminis were seldom serviced at ASC's, and independent garages ruled the roost as far as car servicing was concerned.
While car owners loved the idea that their cars were being serviced by ASC's who were well equipped and trained by manufacturers, over decades the relationship has started to sour, particularly after cars complete their warranty period. As cars got older, and needed more care, upselling and intentional over billing became top customer peeves. Service Advisors incentivised to meet targets made matters worse. Why then did customers not turn to independent garages in hoards, like their parents' generation did? What was wrong with independent garages?
The answer can perhaps be summarised in one word –Trust. Or lack, thereof.
Brands provide the essential trust necessary to engage with any product or service. When a customer hands over his car to an ASC, he counts on the manufacturer to protect his interests. However, with independent garages, are brands a possibility?
Apparently yes, if one goes by the initial success of the current breed of Car Servicing startups.They're quite unlike the brick and mortar third party franchised service center chains found in the west, which, incidentally did not work in India.With a near zero investment in infrastructure, this new breed of car servicing startups are disrupting the market,and customers seem to be loving it.
Make no mistake - the market is huge. Industry estimates peg the Indian car servicing industry anywhere between 20,000 to 30,000 Crore annually (USD 3 to 4 Billion). Some reports estimate it to be even higher, at 75,000 Crores (USD 11 Billion).
So how exactly are car servicing startups disrupting the industry? For starters, they're not going after "solved' problems like establishing spare parts supply chains, or setting up their own service center infrastructure. Instead, they're filling the large voids that exist on the customer experience end of the spectrum by providing a "better than ASC' experience, without "the costs of an ASC'. What are these voids?
1. Technical Expertise:
Reeling under severe skills shortage, independent garages make do with unskilled labour, trained on the fly on the shop floor. ASC's fare better in this aspect, though significant areas of improvement still exist. Successful startups are investing in hiring highly qualified Technical Advisors, with solid industry experience, and culturally integrating them with their organizational culture.
Customers having to "go back to the service center for the same issue' is a huge pain area. Startups are building Known Error Databases, to borrow a phrase from ITIL parlance (Information Technology Infrastructure Library), ensuring known issues are handled better. They're also focusing on solving the problem right the first time, as this experience has a significant impact on customer delight levels.
Anybody who has owned a car and tried to get it serviced knows that the industry is infested with unethical practices. Ranging from exploiting a customer's ignorance convincing them to replace a larger assembly, to charging a higher price for a specific labour line item, there are landmines aplenty every car owner has to navigate.Being ethical, in such an environment, is not only the right thing to do, but is in fact a competitive advantage.
While "free pickup and drop' has been around for a while, customers would love to have the "entire experience' on their phone, at their fingertips. Successful startups handle everything from service booking, vehicle pickup, work progress alerts, estimation approvals, near real-time updates complete with pictures and videos, quality control, drop, and not to mention, payment – completely online. And that's exactly what customers want.
5. Brand (Trust):
It all finally comes down to this, isn't it? The brand. The customer cannot trust an independent service centre, given the dynamics, small businesses are subject to. From employee churn to the proprietor falling sick, no two days are similar at an independent garage. Brands assure customers of consistency, and most importantly, trust. Unlike ordering a pizza or booking a cab, here the customer is handing over his expensive asset to the service center. The importance of the reassurance that a Brand brings cannot be overemphasized.
With over 10 million passenger cars only in major Indian cities, the market opportunity is phenomenal, if one gets the customer pulse just right. The new breed of startups appears to be doing just that.