Business Ideas
Tyre Business, Requirements, Eligibility, How to Setup? Profit Margin, Investment

Tyre Business, Requirements, Eligibility, How to Setup? Profit Margin, Investment

Tyre Business: India has the third largest road network in the world and road travel is the preferred option for commuting in the country. Keeping this in mind, you can easily start any business related to the automobile sector and get success. One such business opportunity is starting a tire business. The country already has well-established tire brands like MRF, CEAT, Apollo, Michelin, JK Tyre, Bridgestone, Goodyear, etc.

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How to start a profitable tire shop business in India?

Tire stores are one of the most popular businesses in the automobile industry. Check out this article to know more about starting a tire shop business and running it profitably.

The tyre store business requires complete control over the inventory and adequate knowledge about the different types of tires that come with different specifications. This business can be started in a metropolitan or a small town.

You should evaluate the car density of that particular location. Starting a tire store with accessories and service facility of vehicle balancing and alignment services is one of the most profitable ventures that can be started with moderate capital investment.

6 steps to start a tyre shop in India

Study the Market and Create a Business Plan

Before starting a tire store, you must have sufficient knowledge about tyres. Tires come in different sizes, shapes, and prices for different types of vehicles. Generally, tires consist of two major distinct segments. One is for commercial transport vehicle tires and the other is for car tires.

Also, study your market competitors where you want to start the business. Write a comprehensive tire store business plan detailing the purpose and mission statement. A detailed business plan will not only help you get started in the right way but will also help you in monitoring the business in the future. Calculate the startup budget along with store rent, equipment costs, inventory, and staffing needs.

Legal compliance is required to start a tyre shop

As a startup, the first thing you need to do is determine the ownership pattern of your tire store. You can start as an OPC (One Person Company) or you can go with partners by formatting LLP, Private Limited, or Limited Company in India. After the formation of the company, you will have to take a trade license from the local authority. Get GST registration as soon as possible.

You can also start a tyre store business by getting an authorized distributorship from any famous tire manufacturing brand. Choose a memorable and easy-to-spell name for your tire store business. Also, check for domain availability when choosing a name. Protect the brand name by obtaining a trademark registration.

Tyre Business

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Find a Location and Set Up a Tyre Store

Like any retail business, location is an important factor in finding success in a tire store business. Select a location that is on a busy high street and has a wide front opening for clear visibility access. You can also consider the location which is near to petrol pump or gas station. You’ll also need enough space inside for storage and equipment installation.

Ask an interior professional to draw up a floor plan. Select space for storage, equipment installation, office, customer waiting room, etc. As the tyre store is a highly inventory-oriented business, it is advisable to start the business with the proper software.

Inventory and Equipment Required to Start a Tire Store Business

The major inventory that is needed to start a tire store is different types of tires as per the market demand. There are various other accessories like different rims, multiple valves, etc.

You should also have some other necessary equipment. These are balancers, centering devices, tire changers, tire pressure and pattern management systems, impact wrenches, etc. Gather supplies from a trusted vendor. Check the warranty period of that equipment.

Manpower required to start the tyre shop

Hire professionally skilled manpower. Make sure they have at least minimum work experience. It is advisable to have an automobile engineer. An automobile engineer is a right person to deal with the requirements of the customers and give them the right advice.

Have an Advertising Plan

A carefully designed advertising plan is vital to running a profitable tire shop. Below are some steps you can consider;

  • Publish some print media advertisements about the grand opening of your tire store.
  • Provide pick-up and delivery service to your customers.
  • You can get some special discount on buying tires with accessories.
  • Provide some services like wheel balancing free on purchase of tyre.
  • Keep a wide selection of stock. Customers are more likely to purchase tires from your tire store if you have a large selection and the size and brand they are looking for.
  • Offer promotional gifts to your valuable customers. It will keep your customer happy and it is also effective as a brand-building tool.
  • Build an online presence by creating a website for your tire store business.
  • Register your products on a popular eCommerce portal to sell tires online.
Tyre Business

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Is the tyre shop business profitable in India?

If you are looking for a retail business in the automobile industry sector and are ready to make a reasonable investment, then a tyre shop can be perfect for you. Both retailing and distribution provide good margins in this business. Generally, a multi-brand store makes more profit than a single-brand store. A multi-brand store may offer tires in a variety of brands and prices. Hence it attracts more customers and increases profitability.

Machinery Required

The basic machinery required to open a tire shop is a compressor, tire changer, and puncture machine. You can also add a wheel alignment machine if required. You can find dealers of these machines on websites like

Investment required for the tyre business

To start a two-wheeler and four-wheeler tire shop in India, you need an investment of around Rs.5 lakh.

  • Machinery & Equipment – 2.5 Lakh
  • Tire stock – 2 to 2.5 lakh
  • Shop interior and signage – Rs 25,000
  • Shop Security Deposit – 50,000 (depends on your location)
  • Running expenses include labor salary, utility bills, shop rent, and stock addition.

License and registration required

You need the following license and registration to start a tyre business in India.

  • Shop and Establishment Registration – On behalf of the State Government
  • Trade license – from your municipality
  • GST Registration
  • Business Registration – Sole Proprietorship Is Enough
  • current bank account
  • Business Insurance (optional)
  • Any local CA or agency can assist you in obtaining these documents.

Space Requirement and Location

  • You can start a two-wheeler tire and puncture shop with 300 square feet of carpet area. You need space to keep machinery and tire stock.
  • You may require 800 to 1500 square feet of space for a four-wheeler shop and there may be enough parking space in front of your shop.
  • The best place to start a tire shop is in a high-traffic area and near a petrol pump.


If you are looking to start a tire franchise and business, a tire dealership is a great place to start.

  • The age of the applicant should be at least 21 years.
  • Applicant must have passed 10th class.
  • There should not be any criminal case against the candidate.
  • The tire industry needs to know.

Important Documents

  • Personal Records:
    • Aadhaar Card
    • PAN Card
    • Voter Card
  • Proof of Address:
    • Bill of Electricity/Ration Card
    • Certificate of Qualification
    • Photograph
    • Email Address
    • Phone Number
    • Current A/C and cheque cancellation
  • Property Records:
    • Sale deed / Shop agreement
    • A lease agreement
    • NOC
  • Documents for Business:
    • GST Identification Number
    • Trade license for outlets
    • Financial Records
Tyre Business

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FAQs on Tyre Business

Is the tire business profitable?
A profit of around 10 percent can be expected in the tire business. It depends on your purchase quantity. You can expect higher margins if you place bulk orders. Smaller tire brands like Chinese brands give you higher margins as compared to big brands like MRF.

How good is the tire business?
The gross margin for your tire store is typically around 43%, which can make it more challenging to incur new expenses and maintain profitability. In tire stores, employee turnover is often high, which can be costly and time-consuming for your business.

What is the cost of the MRF Tire Franchise?
To become an MRF Pretrade franchisee, you need 3200 sq. ft. (300Sq. Mts) industrial space and a minimum of 30 lakhs as capital investment.

Is it profitable to open a tire shop?
How much can you earn as a tire shop owner? The amount that a tire repair shop brings in can vary widely. However, a modest size shop with a few employees and service bays can bring in between $36,000 and $60,000 per month. This can result in monthly profits of $20,000 or more.

Are tires in demand?
The global tire aftermarket, tire replacement market is expected to grow at a CAGR of 4.43% during the forecast period 2022-2028, according to the publisher’s research report. Factors such as rising demand for fuel-efficient tires coupled with mandatory tire labeling norms are expected to fuel the market growth.

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