How To Start Tyres Business in India – A Business Plan to Start a Tyre Dealership in Your Locality

Business involving selling automotive parts is known to be a little costly due to the cost of a dealership or franchise. Yet, they provide good profitability due to the high-profit margin. Among different types of automobile businesses, Tyres Business or Tyre Dealership Business is known to be one of the popular choices. Let us know what makes this business a popular choice as well as the future potential of this business in India

Tyres Business

Overview of Tyres Business in India

India has the second largest road network in the world with around 6,215,797 kilometers as of Dec 2021 after the United States. Road transportation is one of the major sources driving the country’s economy. With such a road presence the usage of automobiles is the most preferred choice by people.

It’s no surprise that the automotive spare parts industry, especially the Tyres Business is one of the thriving businesses in the country with high demand and opportunities

So, today in this topic we will learn how to start Tyres business. The topics going to cover in this article includes

  1. Tyre Business Plan
  2. Licenses and Documents required to start Tyres Business
  3. Requirements to set-up Tyre Shop
  4. Machinery Required
  5. Investment Required for Tyre Business
  6. Requirements for Tyre dealership
  7. Profit Margin
  8. Marketing

1. Tyre Business Plan

Before starting a Tyre business you need to have a detailed business plan on how you are going to set-up and operate the business

In general, Tyres business is done in two methods

  1. Single brand dealership
  2. Multi-brand dealership

In single brand tyre dealership, you would sell only tyres belonging to one brand

For example, a MRF Tyre Dealership

In Multi tyre dealership, you sell different brands of tyres under a single showroom

For example, a Tyre shop selling MRF Tyres, Yokohoma, CEAT, Michelin Tyres, Bridgestone, Goodyear, JK Tyres etc.,

Both of them have their own advantages. For example, in India, it’s no surprise certain brands like MRF is very well known to common people and they prefer buying these tyres due to their age-old presence.

The profit margin in a Single brand Tyre dealership is little high when compared to a multi-brand dealership. However, you can only cater products from a single brand

Whereas Multibrand tyre dealerships make more business as they sell different brand tyres. Capturing a wider audience. However, the margin rates in multi-brand tyre dealership are little less when compared to single-brand dealership

Next thing, in the Tyre business plan should cover

  • Types of Tyres You are going to sell
  • Services you are going to offer in your Tyre Shop

In general, Tyre shops sell two varieties of tyres

  1. Commercial Usage Tyres – These are used for Lorries, Tractors, and Heavy equipment such as Excavators
  2. Passenger Usage Tyres – Used mostly for Motorcycles, Cars, and Auto-rickshaws.

This is an important aspect to be included in your Business plan. Because, if you are setting up a tyre shop in an area located to industries, farmlands and towns then, choosing to sell both commercial and domestic tyres is suitable as you can provide services to all segments

Whereas, if you are thinking of set-up a tyres business within the city where most of the demand is for Cars Bikes and Autorickshaw then go for selling only domestic tyres

Next thing, you need to decide services you are going to offer in your tyres shop

Normally, most Tyre businesses just sell the tyres or provide the installation services

Today, most tyre shops provide different services such as

  1. Selling Automotive Parts such as RIMS, Alloys, Batteries and Tyre Accessories
  2. Providing Wheel Alignment, Wheel Balancing, Nitrogen Air filling, and Puncture repair etc.,

If you have a high budget then you can set-up a large Tyre shop and provide both services. However, if your budget is minimum then, its better to have at least wheel alignment, wheel balancing and puncture services

In addition to this, you can also buy scrap tyres or used tyres and sell them to recycling centres for a small profit margin. This doesn’t require any skill just need a small space to store the used tyres until they were sold to a scrap tyre recycling centre

Now that you were aware of different ways of doing tyre business. You need to invest time in conducting market research and decide which way of business suits your locality and your budget

2. Licenses and Documents required to Start Tyres Business

In order to start a tyre business, you require the following documents and licenses

  • Business registration
  • Bank Account
  • GST Registration
  • Shop and Establishment license
  • Insurance

In addition to this, you can also check whether your business falls under Udyam and register accordingly

3. Requirements to Set up a Tyre Shop

In order to run the tyre shop you need following requirements

Space Required to Set up Tyre Shop

It requires a minimum of 1000 to 1500 sq.ft of rental space in order to set up a two-wheeler tire shop or 4 Wheeler tire shop. This will firstly be sufficient to accommodate at least 2-3 cars or More than five motorcycles as well as a wheel alignment machine

If you do not have such amount of rental space you may place the tyres outside of the shop; However, you must make sure it is not obstructing any ones path

Location of the Shop

An ideal location for tyre shop should be near the highways, by-pass roads, and a location where both commercial as well as passenger vehicles pass-by. It should be easily accessible by road and visible to the public passing by the road

Workers Required for Tyre Shop

You require a minimum of 2 to 3 workers to run a tire business. You must make sure at least one of them is skilled at fitting and repairing tyres. If you own a wheel alignment or other machinery, then you should also make sure the worker is trained to use them without supervision

4. Machinery Required for Tyre Business

Most of the time tyre dealerships don’t require any additional machinery to run the business. However, if your Wheel shop is catering tyre installation and repair services then you need the following machinery

  • 3D Wheel Alignment Machine
  • Wheel Balancer
  • Tyre Changer
  • Vehicle Lift
  • Tyre Inflator
  • Car Jacks
  • Other hardware accessories

5. Investment Required for Tyre Business

In order to start a tyre business as a tyre dealership, you require an investment of around 30 to 40 Lakhs. Here’s the breakdown of the investment

  • Machinery – 7 Lakhs
  • Tyre stock (Two-wheeler and Four-Wheeler) – 5 Lakhs
  • Rental Space Deposit – 100,000 rupees
  • Shop interior design and branding – 10,000 rupees
  • Dealership cost – 25 to 30 Lakhs

Please keep in mind the dealership is the costliest investment in tyres business. Each brand has its own requirement, and the investment will also change as per their norms

6. Profit Margin in Tyre Business

The profit margin in tyre business varies from 5 to 10%. Usually, it depends upon the total sales made by your store. if you have made more sales then, your company gives more profit margin

Moreover, the profit margin also depends upon which variety of tyres were sold. For example, commercial tyres used for Trucks, Tractors gives more profit margin above 10%

7. Requirements to Check Before Applying for Tyre dealership

In India, there are several world-class tire brands that have a presence over the country. Tyre dealership is the most popular means of doing this business, However, it is also the costliest one. Due to the scale of the services and product ranges and brand popularity

For example, In India, MRF Tyre dealership is one of the oldest as well as most popular ones. The approx. investment required to get the dealership of this brand will be around 25 – 40 Lakhs

But having money is enough to get the dealership and start doing the business? Definitely not! Tyre dealership is a competitive business and you will be investing a lot of money into it. If you don’t get enough return you may run into debt

So, to tackle this situation you should know about the important things to keep in mind while obtaining a dealership

Location and Demand of Your Area

You need to understand the fact that location and customer flow are key things for the successful growth of a dealership. The better the location of your showroom the more customers can access it. This can directly influence the growth of the store and will be noticed by the state and national level head office

Conduct Market Research Before Taking a Dealership

You may have enough money with you to get the tyre dealership but without conducting market research you may fail in your business. So, before obtaining the tyre dealership it is always recommended to check three important things

  • How many Tyre dealers were already doing business in your location?
  • How much Margin they were selling for?
  • Products and services they were offering

Training Staff

You need to ensure the staff that you are going to hire knows the local language perfectly and they should be polite and able to address the customer question

Even though you were the owner of the shop you may not be available at some times. In such cases, you need to ensure the workers know how to handle the customer and they should also have sound knowledge on the tyres being sold in their showroom

Business Contacts

Having better connections with diversified businesses is necessary when you are setting up a Tyre dealership as this can increase the visibility of your business. for example, you can reach out to Automobile showrooms, nearby auto-repair shops, farm equipment workshops, and Heavy Equipment Garages and hand them over your contact numbers and let them know that they can reach out if they require any service

Beware of Fake Tyre Dealerships

It is always advisable that you pay utmost attention when you are applying for the dealership. There are several fake consultants and websites claiming they were the original tyre dealers and may scam you by sending wrongful information

It is always advisable to visit the genuine website of the company or call the company customer support for applying the tyre dealership

7. Marketing Your Business

Marketing is necessary for your tyre dealership to improve your sales as well as attract more customers. Here are a few marketing tips that can help grow your tire business

  • Providing prompt customer services
  • Making sure your showroom contact and location details are accessible by internet.
  • Keep your signage and boards visible on road.
  • Displaying Prices for services and offers visible from the road
  • Using Social media platforms such as WhatsApp, Facebook, and YouTube to market your services and new products in your showrooms
  • Advertise in local newspapers and Channels


Tyres Business is a lucrative as well as a competitive business. Yet there is a lot of scope and market demand for this business in India. Along with investment you also need to provide genuine services and try your best to improve your dealership in your locality

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