Automartindia, one of the premier players in the used car business, is in the process of tying up with Mahindra & Mahindra (M&M) dealers to provide an exchange platform to sell the Scorpio. As per the arrangement, to be rolled out in course of the next few days, Automart would station personnel at M&M dealerships who would evaluate the used car of a customer who wishes to upgrade to the Scorpio and buy the vehicle. The payment would be made directly to the M&M dealer which would be subsequently deducted from the value of the Scorpio. “We would initially be rolling out the initiative across major M&M dealerships in Mumbai, Delhi, Chennai and Bangalore. Then we would be going in for a national rollout,” said Automartindia CEO Vinay Sanghi. The potential for such an arrangement is immense, as most purchases of premium vehicles in India are secondary purchases. Most of the first time buyers of passenger cars are below the Rs 3.5 lakh mark, according to industry observers.
“Nearly 25-30 per cent of potential Scorpio buyers would want to exchange their used cars in order to avail of the substantial reduction in cost they would incur,” Mr Sanghi said.
M&M dealers would get a margin from Automart from the sale value of the used car, according to the arrangement. The latter already has similar tie-ups in place for Hyundai and General Motors for their various models.
Automart is also in the process of expanding its co-branded used car outlets with General Motors to 28 by the current year. While the infrastructure requirements would be met by the GMI dealers, the working capital requirements would be met by Automart.
The used car business in India is expected to grow by 10-12 per cent in the current fiscal and with newer models coming in, the incentive to change would be higher.
While the current new to used car ratio stands at 1:1, industry observers feel that the used car business would see more than doubling of growth over present levels.