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According to the Federation of Automobile Dealers Associations (FADA), 2,98,873 lakh passenger vehicles were sold in May 2023 while the sale of 2-wheelers stood at 14,93,234. The overall sales of the automobiles grew by around 10%. The market for automobile is consistently growing in the country and that opens up opportunities for new automobile businesses.

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Although car making is a capital-intensive business, numerous automobile-related business ideas can be implemented with lesser investment. This article throws light on various auto-related business ideas and how to start an automobile business.

Business ideas in the automobile industry

From manufacturing to services, the scope of the automobile industry is vast. Here are some of the profitable business ideas in the automobile industry.

  • Dealership for vehicles: An aspiring entrepreneur can become a dealer for passenger vehicles, commercial vehicles, electric vehicles, tractors, two-wheelers and so on. Depending on various factors such as your business plan, location, etc., you can decide on what dealership to take.
  • Manufacturing auto components: Making small auto components is yet another automobile business idea in the manufacturing space. A car requires several auto parts such as fasteners, door handles, door seals, hinges, locks, lights, sensors, switches, and so on. A car maker sources these components from smaller companies. Alternatively, manufacturing auto spares is also a profitable business idea. Whether components or spares, steel remains the key raw material in the automotive business. If you are considering auto components business, you can procure high-quality steel at best rate through Tata nexarc.
  • Auto repair services: Cars require maintenance and repairs. Starting a business for auto repairs and maintenance can turn out to be a profitable venture. It is one of the low-investment business ideas.

Here are some more business ideas for starting an automobile business:

  • Used car dealership
  • Auto lubrication retail store
  • Auto accessories store
  • Automotive painting
  • Car wash business
  • Auto parts export
  • Electric vehicle charging stations
  • Automobile insurance
  • Petrol pump business

How to start an automobile business?

Do you know what steps are required to start an automobile business? Here is a step-by-step guide for you.

Do the market research

Firstly, you will have to determine what you plan to do in the manufacturing or services business. Accordingly, you will need to do thorough market research and understand the scope. For example, if you plan to make auto components, you will need to understand if any car maker is looking for a vendor for a certain component. You will also need to do a competitor analysis to gauge the scope of the new entrant.

Make a business plan

Whatever auto business you choose to be in, you need to make a business plan. Your market research can give you key details such as demand for the specified products in the market, cost of investment, etc. Based on this data, you can make a business plan that will include a sales strategy, marketing and branding initiatives, technology deployment and hiring plans. This can act as a guide for you once you start the business.

Select a strategic location

Whether you plan to manufacture auto components or open a dealership, location plays a critical role in the business. For example, if you plan to be an auto component manufacturer, it is critical to be closer to your customers i.e. auto hubs like Pune, Chennai, Delhi, etc. Similarly, if you plan to get a dealership of commercial vehicles, then you need to locate it strategically according to your customers and competition. Moreover, when you plan a dealership, the vehicle manufacturer has prerequisites about the location that you need to meet.

Register your company and get licenses

Now you are all set choose the name and logo of your automobile business. You can also trademark the logo through trademark registration. Also, you need to register your company and procure the required licenses. You can register your company as a proprietary firm, partnership firm or private limited company or limited liability partnership (llp) company. You can choose any one of them for registration. If you are having a dealership, you will need to draw a contract with the vehicle manufacturer for which you will need to meet certain eligibility criteria. On the other hand, if you are setting up a manufacturing unit, you will need to get a factory and other industrial licenses. Likewise, you will need to obtain registration and required licenses for the business you plan to venture into. Other important aspects are MSME/Udyam registration and GST registration that every business needs to do.


Simultaneously, you need to arrange initial capital for your business. You can arrange for funds in many ways. Many banks and NBFCs offer business loans for startups while the government also has designed several schemes for new entrepreneurs.

Procure machinery/inventory

Once you have the initial capital you can start business operations. Depending on the nature of your automobile business, you can procure machinery or inventory. For example, if you are an auto spare parts or components manufacturer, you can now get your machinery and raw material required for the business to start production. On the other hand, if you are a dealership or retailer, you can procure inventory.

Get the right technology

In the digital era, you will need digital technologies such as inventory management system, human resource management system, customer relationship management system, accounting system, etc., for running day-to-day operations of your business. You can pick and choose the one that suits you the best.


You will need your team to operate your business. For running any business people with diverse skills are needed. For example, you will need sales staff, automotive engineers, workers for the factory, accounts staff, marketing and branding team, HR, and so on.


Vehicles with the latest technologies like electric cars, automatic cars, etc., are launched at regular intervals in the market. Businesses in the automobile sector need to be abreast with new and upcoming technologies. Also, it is important to keep a constant eye on market trends for your automobile business to be successful.

Also Read:
Best business ideas under ₹10 lakh
12 Creative MSME business ideas
write a business plan for your SME
How to start a steel business in India?
How to start a truck transport business in India?
How to Start an Import/Export Business?
How to start a Steel Business?

Swati Deshpande

Swati is a passionate content writer with more than 10 years of experience crafting content for the business and manufacturing sectors, and helping MSMEs (Micro, Small and Medium Enterprises) navigate complexities in steel procurement, and business services. Her clear and informative writing empowers MSMEs to make informed decisions and thrive in the competitive landscape.