Automotive Sector Franchises: Develop Your Own Business with a Franchise

The UK automotive industry is enormous. It accounts for 12% of all UK exports and invests over £3.6billion in research and development every year. Automotive sector growth has been affected by Brexit and economic fluctuations, but despite the world economy’s best efforts to scupper car company growth, and the increasing awareness of the harm fossil fuels are doing to the planet, it still seems to be in good shape.

This robust and progressive industry is also continually attracting entrepreneurs who see opportunities to build successful businesses offering both services and parts supplies to the trade, customers, and commercial clients. The scope for start-ups and automotive franchises in the UK has never been better or more attractive.

The automotive sector in the UK

There’s no doubt about it – we Brits love our cars, vans, motorcycles and anything that runs with any kind of engine on the road. The automotive industry is worth a colossal £82billion to the UK every year, and the sector employs over 850,000 workers in both production and supporting roles. Despite what you may have heard, the UK's automotive industry is doing very well, with six mainstream manufacturers calling the UK home, and over 60 specialist car companies turning out high-end, bespoke and incredibly collectable vehicles like the Morgan and the Aerial Atom.

The industry has a subsection of around 2,500 suppliers and is at the cutting edge when it comes to research and development. With all of this going on, and a vast audience of drivers to cater to as well (over 2½ million new cars were registered in the UK in 2017) , it’s no wonder that automotive franchises are both highly lucrative and very attractive business propositions that deliver high returns for a relatively affordable initial buy-in cost.

Potential for growth

Any automotive sector overview demonstrates that the level of investment in R&D is increasing. It proves that the automotive industry is not resting on its laurels, but is continually pushing forward with new ideas. The development of new forms of power such as electric, hybrid and even hydrogen-powered vehicles is penetrating the traditional petrol/diesel market, driving innovation and opening up new opportunities for those providing external services and products.

However, there are some aspects of the automotive industry in the UK that remain the same, such as consumables, tyres, valet services, and those dreaded windscreen stone chip repairs. Regardless of what type of vehicle you drive, there will always be a need to fix punctures, replace or repair cracked windscreens, and try to revive that ‘new car smell’ and get rid of the odour of wet dog from the back seats with a thorough clean. This is where automotive franchises come in.

Automotive opportunities

The automotive sector offers plenty of opportunities for franchises, although it pays to think very carefully about what type of business you want to go into before you invest your money. For example, you may be keen to open up a tyre franchise, but if you have large companies like Kwik-Fit or National Tyres in your area, you could find yourself up against some very stiff competition. However, there are other avenues you can explore, such as:

Stone-chip repairs – we’ve all had that heart-sinking moment when a stone thrown up by the tyres of the car in front makes contact with your perfect windscreen, putting a large chip in the surface. If it's not dealt with quickly, it can lead to a crack that will mean you have to replace the whole windscreen. Some businesses specialise in repairing chipped windscreens before you get to that point, and one of our favourites is Optic-Kleer. This franchise operates right across the UK, and for an initial buy-in of £15,000, you could see a monthly turnover of over £5,000 by repairing just five windscreens a day.

Valet services – nobody likes a dirty car, which is why valet services are on the rise. To keep that ‘new car smell’ a professional valet will do more than just wash the paintwork and hoover the floor mats – they’ll clean your car from top to bottom.

Specialist wheel cleaners – one of the best bits of ‘bling’ on any hot hatch are its alloy wheels. The trouble is, wheels take a pounding every day and are difficult to polish up to as-new condition. Specialist franchises such as The Wheel Specialist only deal in restoring and reviving alloy wheels, and a £45,000 buy-in will give you a business with a heritage that goes all the way back to the 1950s and provides powder coating, chroming, wheel balancing and strip-and-refit services.

For more ideas on automotive franchises, check out our Top Five Franchises for Car Lovers, or have a read of our Top Five Automotive Franchises and our Automotive Careers articles.

A changing sector – the growth of hybrids and electric vehicles

There is no doubt that the automotive sector in the UK is changing, primarily in response to the shifting demands of a more environmentally-conscious buying public. It's worth watching out for new opportunities in the green motoring sector, as well as the more traditional business models of supplying everything from parts and tyres to air fresheners and valet services. We predict batteries and power cells will be a big growth area in the next few years, as more cars move over to hybrid and fully electric propulsion.

Conclusion

The automotive sector has been around for well over a century, and it seems we’re still passionate about our cars. The automotive sector growth figures demonstrate that billions of pounds are still being poured into R&D and that the car industry is incredibly healthy in the UK.

That means there are enormous opportunities for franchise entrepreneurs who can spot a gap in the market, and have the capital to buy into a solid business franchise with an established reputation. Other opportunities are also on offer that incorporate more tech-friendly models such as eTyres (selling tyres online). But there’s still room for those always-in-demand services such as dent repairs and valet services.

In the future, it’s worth watching out for new opportunities that take advantage of the growth in eco-motoring, such as fuel cells and batteries, as well as essentials such as parts, cleaning supplies and even air fresheners. Both the domestic and commercial marketplaces are relatively recession-proof, and automotive franchises represent a high-return opportunity for those with the right entrepreneurial spirit and investment capital.