Ford is going to enter the used car space very soonthey have already planned it out and the company will make a public announcement very soon, said an industry source who did not wish to be named. The company would enter the multi-brand used car space selling models across companies and not restrict it to only used cars from Ford, he added.
Ford India spokesperson said, India is an automobile market with large consumption patterns and the used car industry bears great potential in this context. Our dealer base is independently involved in car exchange programmes for consumers at the local level. We constantly explore newer opportunities to grow our business and reach out to diverse consumer needs though there are no immediate plans to share.
According to car analysts, companies explore the used car space since it gives them a wider reach to connect with customers. First time buyers generally go in for used-cars since they are more affordablewith cut-throat competition in the car market, carmakers have to be present in as many segments as possible. The used-car route is a viable option because it does not require huge investments, said S Ramnath, an auto analyst with Mumbai-based brokerage firm SSKI Securities.
Fords traditional rival General Motors has also sensed a similar opportunity and are gearing up for a massive expansion drive in the next few years. According the companys vice-president for corporate affairs P Balendran, the company is set to increase the total Chevvy OK outlets to 70 from the current 45. However, unlike Fords plans of entering the multi-brand used car space, Chevvy Ok offers only GM products.
There are three reasons why used-car space makes sense. Firstly, it gives our dealers additional revenue. Secondly, it gives us extra volumes and, thirdly, it enriches our corporate image, Balendran explained.
At present the used car space is 1.1 times bigger than the new car segment with an estimated size of Rs 47,500 crore. In the US, the used car space is two and a half times the size of the new car segment.