With many cars on Kenyan roads, the car spare parts business in Kenya is a good venture. People need to change auto parts from time to time and when a car breaks down, thereby providing a large market for auto spare parts business. However, the business is competitive and you will need to work out your way to win. However, if you follow this guide on how to start auto parts business in Kenya, it will be pretty much easy to get a share of the market.
Research the Market
To win in business, you must first understand the market and how the business works. As such, you need to do comprehensive market research. When researching the market, seek to understand auto spare parts in demand, good business location, auto spare parts pricing, where to source auto spare parts, etc.
Write an Auto Spare Parts Business Plan Kenya
Once you have carried out comprehensive market research, the next thing is to write a business plan. A business plan acts as a roadmap for any business. If you have researched the market, it becomes very easy to write a business plan. You will need to put down your findings on a paper.
Some of the items to list in your business plan include:
- Business location
- Startup capital
- Auto spare parts suppliers
- Strengths and weaknesses of the business
- Risks and how to mitigate them
Read more: How to write a business plan.
Identify a Good Business Location
The next thing is to find a good business location for your automobile spare parts. Look for a place where there are many cars or near a business related to motor vehicles. For instance, you can start your auto spare parts business near a car wash or a garage. These are complementary businesses that can help you get customers.
Register Your Business and Secure Business Permits
You need to register your business on E-Citizen before you can start operations. You also need to secure business licenses and permits. Failure to do so, you will always be in conflict with the authorities. It will cost you around Ksh 1,000 to register your business while business permits will cost your around Ksh 10,000 annually. You will need to present your KRA certificate and a copy of your ID.
How Much Does it Cost to Start a Spare Parts business in Kenya?
The cost of starting an auto spare parts business in Kenya depends on the type of spare parts you are selling, business location, and the size of your business. To start a small spare parts business in Kenya, you need at least Ksh 700,000. Most of the money will go into buying spare parts inventory.
Related: Most fuel efficient cars in Kenya.
Fast Moving Spare Parts in Kenya
To make significant revenues from the auto spare parts business, you need to stock fast-moving spare parts. They include headlights, rear lights, brake lights, steering wheel, tires, batteries, fuses, shock absorbers, fuel filters, muffler exhaust, lubricants, transmission fluid, windscreen, side mirrors, brake pads, catalyst converter, fuel pump, control arm, and radiator.
When buying car spare parts, also consider dominant car brands like Toyota, Suzuki, Nissan, Mazda, Suzuki, etc.
Where to Source Auto Mobile Spare Parts in Kenya
There are many places you can source auto spare parts for your business in Kenya. First, if you have the means, you can import directly from countries like Japan and Germany. If you don’t have the means, you can source automobile spare parts from major towns like Nairobi, Kisumu, Mombasa, Eldoret, Nakuru, Thika, Meru, and Nyeri. Look for reputable auto spare part wholesalers in any of these places.
Is Spare Parts Business Profitable in Kenya?
The profitability of your auto spare parts business depends on some factors like business location. The profit margin of the motor spare parts business is between 10% and 20%. To make it in the business, ensure that you have spare parts for dominant car brands and then establish your business in a busy location.
Summary of How to Start an Auto Mobile Business in Kenya
Starting an automobile business in Kenya is easy, but capital intensive. For many people wanting to start this business, their biggest challenge is startup capital. If you want to start the business, look for areas near car parking, garage, or carwash. Then make sure to sell quality and genuine spare parts. If customers trust that you sell genuine spare parts, they will refer their friends to your business.