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Automobile Business Ideas for Start-ups in India

calendar03 Jan, 2022
timeReading Time: 3 Minutes
Automobile Business Ideas for Start-ups in India

Starting a winning business can be a bewildering experience for any entrepreneur or start-up. Similarly, identifying a viable venture for a new business can be equally perplexing.  In this write-up, you would come across some popular automobile business ideas that seek low to moderate investment and ensure good ROI. But before we explore the popular automobile business ideas, let’s dive into the market condition of the Indian automotive sector.

Market Standing of Indian Automotive Sector

  • India is projected to be secure third place in the global automotive market in terms of volume by FY 2026. The Indian Auto sector presently manufactures 26 million vehicles, including commercial vehicles, passenger vehicles, two-wheelers, and three-wheelers in April-March 2020, with around 4.8 million units shipped abroad.
  • India has a commendable presence in the global heavy vehicles market as it is the largest tractor producer, 2nd largest bus manufacturer, and 3rd largest heavy trucks manufacturer in the world.
  • The EV market is projected to thrive at CAGR 0f 44 per cent between 2020-27 and is likely to reach 6.34 million unit yearly sales by FY 2027. Also, this sector will create five cr jobs by FY 2030.
  • The passenger vehicle sector in India is projected to register a growth of 25 per cent in FY 2022.

Now let discuss the popular automobile business ideas for entrepreneurs with low risk appetite

Read our article:How to Secure Petrol Pump License in India?

List of profitable automobile business ideas for start-ups in India

The section below discusses the popular business ideas in automobile sector

Automobile spare parts business

The auto spare parts market has expanded by a CAGR of 3.28% from 2016 to 2020 to attain a valuation of US$ 45.90 billion in 2021. The sector is projected to secure a valuation of US$ 200 billion by FY26. The auto spare parts sector is projected to rise by double digits in FY 2022 owing to the speedier development and advent of cutting-edge production technologies. Thus, the automobile spare parts business is one of the most stable and profitable business models in India. Setting up a moderate-sized auto spare retail shop attracts the minimum funding of Rs 30 lakhs.

Common permits and licenses required:

Used car dealership

India used car market’s valuation is currently floating above USD 27 billion, and it is projected to attain the figure of USD 50 billion by 2026.

The Coronavirus outbreak had a minimal impact on the auto sector. With the increased no. of customers preferring individual mobility and diverse finance options infused into the used car market, the market is likely to witness considerable growth.

Due to the Covid-19 outbreak, reduced cash inflow has forced the end-users to look for options other than new vehicles. Therefore, setting up a used car dealership, particularly in metro cities, is a profitable business idea for startups in India. Investment-wise, starting a Used car dealership attracts a minimum funding of Rs 10 lakhs.

Common permits and licenses required:

Export of automotive parts and tools

India has a solid market presence abroad when it comes to the auto export business. The evolving quality norms for auto part manufacturing have enabled India to ensure widespread customer reach within domestic as well as international markets. Thus, auto parts’ exportation is one of the best automobile business ideas for startups across India. The investment of ₹15 to 20 lakhs is enough to start such a business model.

Common permits and licenses required:

  • Import Export Code granted by Directorate General of Foreign Trade, i.e. DGFT[1].
  • Trade license
  • GST Registration
  • EPFO registration (establishment having 20 or more employees are mandated to secure EPFO registration)

Food truck service

The food truck business has gained immense popularity lately due to evolving customer preferences and lifestyles. The advantage of mobility enables food truck business owners to address a wide range of customers, which otherwise remains to constrain for an individual stationary restaurant.

Common permits and licenses required:

  • FSSAI registration
  • Commercial vehicle license from RTO
  • Fire Safety Certificate
  • NOC from local body


The automobile industry is thriving at a healthy rate despite the early setback created by the Covid-19 pandemic. Upcoming entrepreneurs and startups can choose one of these automobile business ideas and lay down the foundation of a profitable business. As you can see, every business idea above attracts a different type of license and permit. Thus, it is important for you to identify the underlying legalities to avoid future complications. Connect with Corpbiz just in case you seek some professional assistance in this context.

Read our article:How to Setup Helmet manufacturing business in India?

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