- Motorists spend R37 billion on car parts and services each year, much of which passes through established automotive franchises.
- There are dozens of options available, many of which don’t require technical knowledge about cars.
- Here’s how much it costs to open a brand name panel beater, workshop, car tyre or battery fitment centre, used car dealership, or aftermarket parts franchise in South Africa.
South Africans spend a staggering amount on fixing up their vehicles each year. Some reports suggest it’s as much as R37 billion, on components and servicing alone – with up to 18,000 small and medium enterprises operating in the aftermarket space.
With the recent victory for the right-to-repair campaigners, and some 3,458 different cars across 55 brands, the aftermarket industry is only set to grow further. And one of the easiest ways to tap into this is through an established franchise.
The industry contributes 6.5% to the country’s GDP, and automotive aftermarket franchises make up around 7% of the South African franchising picture.
Most automotive franchises don’t require business owners to have technical knowledge of vehicles; this usually comes with staff training as part of the franchise. And there are options available in multiple price brackets and various niche subcategories, from panel beating to spares.
The cost of car-related franchises therefore varies wildly depending on the nature of the business, but you can expect to pay anything between R50,000 and R2 million in startup fees.
Here’s how much leading car-related franchises cost in South Africa.
Midas claims to be the largest automotive aftermarket parts franchise in South Africa. The store primarily sells car parts, accessories, and related lifestyle equipment across multiple brands. Midas has a national footprint, and there are currently more than 300 franchisees in the country.
Midas franchise cost: A Midas franchise requires an upfront fee that starts at R50,000, depending on size and location. The franchisor only provides total ongoing financial commitments on application. Established and profitable Midas franchises occasionally come up for sale for upwards of R5 million, including stock.
Auto Magic is a car body repair, panel beating, fitment, and spray-painting franchise that’s been in business for over 19 years. The company has an extensive network of agents and franchisees specialising in most auto body repairs. Although franchisees don’t need specific vehicle-related qualifications, Auto Magic will assist branches in hiring staff with the relevant experience. Instead, according to the franchise website, the ideal candidate has ambition, commitment, and capital.
Auto Magic franchise cost: Franchises cost approximately R3.5 million, of which 40% must be available as unencumbered capital. Auto Magic does not stipulate ongoing marketing and management fees.
Battery Clinic started as a battery reconditioning business called Steve’s Battery Clinic in 2006. The company has since expanded to ten outlets offering reconditioned and new vehicle batteries. They’re accepting applications from interested franchisees in South Africa who want to enter the battery sale and refurbishing industry.
Battery Clinic cost: Battery Clinic requires a total investment of R700,000, after which franchisees pay 10% for ongoing marketing and management.
Battery Centre sells Raylite batteries and other related automotive services from a national network of franchises. One hundred fifty branches in South Africa sell and fit batteries for most makes and models of vehicles. The business is open to franchisee applications from “dynamic entrepreneurs” who are passionate about customer service.
Battery Centre cost: A new Battery Centre franchise requires an initial fee of R150,000, plus an establishment cost of R511,200. With a working capital of roughly R200,000, franchisees can expect their initial investment to be just under R1 million. Battery Centre does not stipulate ongoing marketing and management fees.
Motolek is a chain of 35 independent auto electrical workshops located throughout South Africa. The business belongs to the Africa Automotive Aftermarket Solutions and claims to have established a credible and reliable network of professionals who specialise in auto electrical and related services.
Motolek cost: A new Motolek franchise requires an upfront fee of R25,000 and costs R250,000 to R350,000 to establish. With a recommended working capital of R250,000, the estimated total investment is between R500,000 and R800,000. Motolek does not stipulate ongoing marketing and management fees.
Car Service City
Car Service City is a full-service workshop for vehicle repairs. They offer customers minor and major services, genuine replacement parts, and financing options. Franchisees do not require servicing or mechanical knowledge, with technical support and staff training coming from a head office level. They currently have more than 70 RMI-accredited workshops throughout South Africa and are accepting applications from new franchisees.
Car Service City cost: New Car Service City franchises start at R1.2 million. Franchisees must pay ongoing marketing and management fees that total 7.5%.
InspectaCar is an automotive franchise that essentially sells used vehicles. The business is certified by WesBank, which gives franchises “a reputation of integrity that is difficult for a non-branded used car dealership to achieve”. InspectaCar head office connects franchisees to manufacturers and rental agencies and offers group buying benefits and access to training.
InspectaCar cost: InspectaCar requires an initial joining fee of R200,000 for a new dealership or between R800,000 to R1 million to convert an existing dealership. Additional fees for the dealership launch, website, promotional material, software, uniforms, and stationery can cost upwards of R100,000. They also recommend new dealerships have at least R3 million for vehicle stock. For each vehicle sold, franchisees must pay a R300 marketing contribution.
Supa Quick is a national franchise that sells and fits tyres, batteries, exhausts and shocks. They have more than 200 fitment centres in South Africa but are open to new franchisee applications in areas not currently serviced.
Supa Quick cost: According to franchise documents, the setup costs of a Supa Quick franchise range between R1.5 million and R2 million. Franchisees must have 50% of this in unencumbered cash. Franchisees require money for working capital, various setup costs, water and electricity, equipment deposits, an initial franchise fee of R65,000, and a reception area of R90,000. After this, they charge a 1% monthly license royalty and a 2.5% monthly marketing fee.