The company currently has 61 branches in 19 provinces, with 59 trading as Shell Autoserv and the other two as Max Center.

CEO Chroong Kanjchanapoomi said yesterday that the company was setting up a franchise system and other management systems, including human resources and information technology.

He declined to give more details about the investment in the franchise plan or its scale.

The company needs to prepare well for such a system in order to ensure good control, Chroong said. Franchises are very new in the fast-fit business and very different from those in the retail sector.

He said the franchise system will be adapted from a system used for 10 years by Giffy Loop, an affiliated company in the US that has 1,600 franchisees and 400 of its own branches.

Giffy Loop became part of Shell Group in the last year when the multinational overhauled its global organisation.

Currently, each Shell Autoserv branch in Thailand requires about Bt10 million to set up, depending on the location.

Chroong said the franchise system will benefit the company in terms of finding good locations with affordable land prices, which is now more difficult than in the past. Expanding alone would take time and make it lose business opportunities.

From January to July, Shell Autoserv in Thailand experienced sales growth of 9 per cent, beyond its expectations. Lubricants were the brightest star, growing 23 per cent, and tyres grew 7 per cent. Shell Autoserv now expects 10-per-cent growth for the whole year.

During the first seven months, tyres accounted for 60 per cent of its total sales, maintenance 15 per cent, lubricants 11 per cent, brakes 7 per cent, shock absorbers 4 per cent and batteries 3 per cent.

In terms of market share, its tyre-change service accounted for 6 per cent, shock absorbers 5 per cent and brakes 2 per cent, with batteries, lubricants and maintenance each accounting for 1 per cent.

The company plans to open five more branches this year - four in Bangkok.

Apart from Thailand, Shell Autoserv has 23 branches in Singapore and three in Malaysia. It plans to open six more branches in Malaysia before the end of the year.

Its total investment budget for this year is Bt120 million, with Bt90 million earmarked for Thailand. It has already spent Bt20 million on opening two new branches.

The company expects to achieve sales of Bt1.6 billion by the end of the year, of which Bt1.3 billion will come from Thailand and the rest from Malaysia and Singapore. Last year, its sales grew 8 per cent.

Nitida Asawanipont

The Nation