Avan Motors to open over 100 dealerships pan-India by 2019

In line with its objective to establish nationwide presence, electric-scooter startup Avan Motors aims to open 100 plus dealerships across India by 2019, a company official said. 

“With 100 plus new showrooms by 2019 we are targeting to enter into 11 new states including Rajasthan, Punjab, West Bengal, NCR and the North-east region." told Pankaj Tiwari, business development head, Avan Motors. 

Currently, the Pune-based startup is barely cloaking a sales of 100 units per month and has around 30 dealerships in the states of Maharashtra, Karnataka, Uttar Pradesh and Madhya Pradesh.

Tiwari further said that in each of these states the company is focusing on the cities where the two-wheeler traction is maximum with an intention to move up its sales target of 1000 units a month by the end of this year. 

When asked about expenses involved in setting up new dealerships, he said the dealers of the respective showroom will bear the cost of infrastructure while promotional cost will be shared by both dealer and the company. "We are aiming to give 8-10 per cent profit margin to the dealers per model", he added. 

Keeping in view the anticipated sales target of 1,000 units per month from over 100 outlets, the viability for the dealer network will become a big question. With a margin of about 8-10 per cent for the dealership as claimed by the company, on an average one dealership will not be able to make more than Rs 70000- Rs 80000 per month from sales. Price range of the products lies between Rs 47,000-Rs 80,000.

Looking at the average monthly sales of 100 units so far, there may not be big opportunity in the service too. The increasing real-estate and manpower cost may become a challenge for the network partner at a low sales volume.

However, highlighting the prospects where the dealers can earn their profits, Tiwari mentioned "Once the dealer attains the exponential growth he can earn smart revenue with the standard industry margin of 8-10 per cent. Also beyond this dealer would be getting the extra benefits through the incentive schemes run by the company. After sales service, spare parts and accessories business is another revenue centre for the dealer."

Apart from dealership network, the Avan Motors is also targeting institutional sales and corporate sales to widen its domestic base.

Last week, the company introduced new smart e-scooter Trend E, the latest addition to its Xero series, at the Automobile Expo 2019 in Bengaluru. Powered by a detachable lithium-ion battery and with a top line speed of 45 kmph, this new model is all set to make its official launch in the standard segment by end of this month, Tiwari informed. 

Commenting on the product strategy he said “Unlike our entry segment e-scooters Xero and Xero+ which are made for youths, Trend-E will be launched in standard segment targeting riders of all age groups. Beyond this our upcoming launches will be executive and premium segments.”