This startup idea can be a turning point for the Automotive industry
By: Gokul Sehgal
Tags: Automation, Entrepreneurship, Cars, Automotive, Business

Expedite Automation

Introduction and Vision

Car modification is a common thing to do in a motorhead’s life. Everyone likes to enhance their vehicle’s performance, elegance and most importantly, decrease that 0–100 kmph. This startup idea revolves around the lucrative and incredible world of car tuning and modifications

After the rise of capitalism there has been an overflow of large enterprises entering almost every field of work. For instance, who would have thought a large enterprise would start dominating a field like eyewear retail, but then we saw the rise of Lenskart. If you needed to buy new glasses and did not know any of the companies, will you choose a local store or trustable franchise of a multimillion-dollar company. I applied the same concept to car modifications. Almost everyone admires a well-built, fast and good-looking car, but if they wanted to build one themselves, most of them won’t know the first thing about it, even if they could, will they be able to afford it or trust someone to work on their car? I want to make that service cheap, more accessible, and more refined so that anyone can fulfill their desire of driving an Outstanding car.

BODY

Expedite Automation will be your go-to place for making your vehicle faster, better and to personalize it.

These modifications can range from upgrading your wheels to get a better acceleration and cornering speed to changing you exhaust so that you get an awesome sound from those long and hard revv’s.

The Modifications will not only make your car faster and more elegant but will also increase the comfort and give a luxurious finish as per the request of the client. The operation will start as an advanced tuning workshop and potentially expand to a multi-national company with franchise’s all over the world. The day-to-day functionality of the company will include:

• Basic car modifications

• Investing in used cars and reselling them after significant modification

• Restoring discarded cars and turning them into sleepers (also for re-selling)

• To work on artificial intelligence in self driving cars and potentially program conventional vehicles to be autonomous.

• Facilitate affordable insurance cover by partnering with other companies

The functionality will change over the years with development of a company through a variable business model. The workshops will provide top of the line modifications that will provide you the performance and efficiency that the factory sets fail to.

In the long run, I can see the cluster of workshops build into a multi-million dollar company offering these affordable services all around the world.

Adjustment to the pandemic

The pandemic caused all of us to retreat to our homes with inability to go outside. There is a possibility of another pandemic in the future, so I thought of a solution catering to the people trapped inside their homes (or having limited travel options).

I thought about designing an application, with an in-built simulation. When you enter the website, you will need to enter your car’s make and model. Then a tool bar will show up, telling you all the available modifications. As soon as you select a modification (for example a turbocharger), the simulation will show you all the statistics of your car in a numerical and graphical format and show how the modification will improve them, for example (increase the horsepower from 140 » 170).

After you select the modification you want, you can either order the parts at your home or have car picked up from your house, taken to the nearest store and tuned, then sanitized and delivered back.

This idea’s application is not just based a pandemic, it has a huge potential and application under normal circumstances as well.

Insurance cover

When you modify your car you either lose your insurance cover or have to pay a premium on your monthly payments making it expensive. This is because some of the modifications might jeopardize your car’s safety.

Once the company becomes large enough, we can facilitate an affordable car insurance cover by partnering with other insurance companies to help you gain a sense of security.

Market Demand and statistics

With the innovation and development in automotive industry, the cars and their parts tend to last a lot longer, opening the opportunity to make enhancements. This need for improvement can be crucial sometimes, because of the cost-cutting practiced by major producers, compromising the safety and quality of the vehicles. Also, there’s always that need to go faster in us car enthusiasts that must be acted upon.

There has also been significant growth in this sector and according to latest projections, it is predicted to rise even more in coming years. the automotive repair and maintenance services market is projected to grow by USD 94.28 billion during 2020–2024, progressing at a CAGR of over 3% during the forecast period according to an analysis conducted by Technavio. Even the Covid-19 pandemic did not have a significant impact on the industry and there will certainly be prominent growth in the future.

Relevant Products and competition

It is very difficult to come up with a new and innovative idea these days, because most of the things that can be done, will be done and are being done. But there are some loopholes in the prevalent systems with limitations to their operations.

Most of the big shots in this industry focus their works on one major automotive producer (like BMW, Mercedes), and the others who work on all cars and have a vast operation are limited to their one or two workshops defeating the idea of accessibility and cost effectiveness.

The idea is to differentiate my company from the competitors by focusing on a variety of vehicles (and increasing that range with time) rather than a particular make or part.

Some of these aforementioned companies are:

• AC Schnitzer (Specializes in BMW, Mini, Jaguar, Landrover and Toyota)

• Brabus (Specializes in Mercedes)

• Carlsson tuning (Specializes in Mercedes)

• Enkahnz

A much smaller operation which extends their work to various producers.

As for the simulation application, the company Brabus has a similar configurator in their website. Even though it is well programmed, it provides limited features where it does not provide the performance data of the car and it does not provide you with the option of choosing different models.

Brabus online configurator

The Brabus configurator can be found here

Target Customers and Countries

There are no bounds on the types of customers we would like to attract, well that is the whole point isn’t it, accessible and affordable to everyone!

But I thought of another idea to add a segment to the company, which is a much more exclusive and premium segments. The aim of this segment will be to provide the highest quality paintjobs, wrapjobs and mods to that top 1% of the population, for more profits and more options.

As for the simulation app, it will cater to the need of people with limited travel options, who don’t have accessibility to the workshops.

It will also help people who are not as interested in this subject matter as the others, the people who just might give it a try. This app will give them accessibility to just try these options without making a trip to the workshops, at the comfort of their home, to see what might be. This will increase our potential customers base and provide us with the opportunity to increase our market outreach.

Target countries

Even though affordability will be one of the core aspects of Expedite Automation, it is improbable that it will be a successful operation in a developing country like India. For the company to grow significantly at the beginning, it needs to be based in Country with a higher per capita income and a more stable economy.

Hence it will be preferred for the start up to launch in a first world country like USA, UK, Germany etc. After the company grows to a multi-national level, then it will have prospects to expand to a country like India, So that in case of failure, The company still remains stable and operational.

Necessary equipment

To start a workshop, I will obviously need some top-quality equipment including hardware and software components, this will include (but not limited to):

• Basic Hand Tools to Simplify Work

• Power Tools for Productivity

• Air Tools for Multiple Usage

• Air Compressors for Air Power

• Storage for Cleanliness

More specifically,

• Hoists

Good quality hoists which raise the vehicle in order to work on it

• Spanner

Since different car manufacturer’s use different gauges, a larger number of spanners will be needed to remove different nuts and bolts

• Tire changer

To increase the efficiency of changing tires and reduce the use of manpower

• Toolbox

To safely store all the equipment and tools

• Auto-scanner

To keep track of the live diagnostics of the vehicle being operated on.

(To read about this in greater detail click here)

as for the simulation app, I will program it with jQuery in the front end and python in the back end.

Chain of command

The chain of command of the company can be briefly explained through this flow chart, of course there are a lot of moving parts in a company and a lot more important people than these specified positions for instance each workshop will have at least 6 to 7 technicians to make the operations run smoothly.

Other important positions like these will be assigned in time and with the development of the company since this is a vague format to explain it.

Estimated budget

To start off with the first workshop an initial investment of roughly $70,000 will be needed, which will include $30,000 — $35,000 worth of equipment (car hoists, hand tools etc.) and the cost of rent and day to day expenses. From the research I did on the current operations I concluded that the weekly costs of running the workshop will range from $2,700 to $3,000. These costs will obviously increase as the operations expands, since a variable price model will be in use. These day-to-day costs will obviously change with time.

Pricing

The cost structure will depend on the services that are provided. A fixed rate of $80 per hour will be charged at the start and a 12% percent markup on all the parts I sell. The services that will render the most revenue will include full engine rebuilds and our operations on self-driving and electric cars (for the day to day in the main segment).

The most lucrative part of this business will be the premium segment of the company which will provide us revenue ranging from $6,000 to $10,000 per car (this includes wrapjobs, carbon fiber and chrome treatment, vinyls etc.)

Another profitable segment will be selling of modified cars, for instance a factory set Mercedes-Benz G500 costs approximately $140,000 and Brabus Invicto a heavily modified version of the car goes for approximately $800,000.

Marketing strategy

The success of Expedite Automation will be heavily dependent upon sophisticated and powerful marketing strategy. Firstly, our competitive pricing will help us gain an edge over our competition. We will advertise our accessibility, affordable prices, and the wide range of services we offer on the internet, billboards, radio stations and through communication cycles that will help us attract customers and eventually gain enough revenue to invest in a Television Ad.

The company will assign a social media team to establish a large social media presence, joining in on the latest trends to get a larger outreach to potential customers. Through social media we will also showcase our work to the millions sitting at home.

Our advertisements will emphasize on the simulation app which is a relatively newer and a much more innovative project with potential to draw attention of the masses. It will encourage people to see the hidden beast that lies in their “economical” automobile and modify it in accordance with their taste. The simulation app with enough development and marketing can be a turning point for the industry.

Eventually as the chain of workshops grows into a multi-national company, we will invest in a much larger and intricate marketing strategy, increasing the target audience and offering discounts on our already under-cutting prices.

Risk analysis

As expected, there are a certain level of risks and obstacles that might pose a threat to the functioning of the workshops. Firstly, there is the risk that the government guidelines pose which is a gray area as of now.

With new emerging technologies like electric cars and HCEV’s, there are not many government guidelines about their tuning and modification. The factory set Electric cars have speed limits programmed into them that cannot be changed by ordinary equipment. Our workshops will possess the technology to safely change these speed limits which will open-up a whole new world for car modifications.

This is a 50–50 situation, since there will be a decline in gasoline-based vehicles some of our services will be rendered useless. But with the potential modification of electric vehicles, we can move on without going into loss if the government releases guidelines that are in our favor. If they do not, we will need to adjust our business plan as per the guidelines leading to potential loss. As for now this is the biggest threat to Expedite automation aside from normal threats like safety hazards and mishandling of funds leading to bankruptcy.

Milestone and timeline

The initial strategizing will take a few months. Then it will take 4 to 6 months to find a place to lease and successfully acquire it and another 2 to 3 to purchase all the equipment and move in. During this we will also need to apply for certification which will take about a month (considering all the requirements are met). We will also need to apply for state business registration which also takes about a month. Another time-consuming factor will be streamlining the flow of funds which can also take up an initial 3 months. To sum it up, it will take about one or one and a half years to get the operation up and running smoothly.

After it has been set up it might take another year or two for the business to become profitable.

Envisioning this idea feels very exhilarating, The implementation can be difficult depending upon the state of the market. I really hope to work more on this idea in the future stages of my life and start a successful business out of it.