The used car market is witnessing positive growth as owning a new car is expensive, given the cost of insurance, tax, and the waiting period. However, new models are making their way into the used car market and so are premium luxury brands. The wide choice of vehicles, financing options, and the value of used cars have made them popular.
With used cars becoming a popular choice, used car dealerships have also evolved, becoming more tech-focused, leveraging the power of the internet to sell cars. One such brand in the Indian market is CarzSo, a “Virtual” dealership for pre-owned cars. To know more about the business, we speak to Vaibhav Sharma, the Founder and CEO of CarzSo.
Speaking to Vaibhav about how CarzSo became a business idea, he said, “Being trained on “The seven habits of the highly effective people”, I am accustomed to learning from failures. My previous failed startup in Healthtech “Carions Healthcare” (Creating EHR) during 2015-2016, was a key stepping stone towards building CarzSo.” He added, “CarzSo as a concept emerged in 2019 when I moved out of Audi / Porsche and started brainstorming on these challenges and the possible opportunities that arise consequently.”
“While brainstorming on the market opportunity, we realized that no single player was offering online retail of pre-owned cars in India (in 2019). Further, we learnt that the digital pre-owned car market is emerging as a game-changer, especially with the Indian car industry set to become the third-largest.” Vaibhav came up with the idea of building a virtual showroom for the auto industry. The plan was to bridge the gap between physical and digital sales of cars, leveraging technologies like AR and VR. “We wanted to lay a solid foundation and be all set to scale up operations while staying at the forefront as the sale of cars in India digitise,” said Vaibhav.
Speaking about CarzSo’s presence in India, Vaibhav said, “We began our operations in Ambala and later on went to expand our footprint across tier 1 and 2 cities adjoining Ambala. Now we have operations across Gurugram and are planning to launch multiple virtual stores starting from Karnal – to further concentrate on non-metro cities and adjoining rural areas. Further, in Gurugram, we are launching India’s first Superstore of preowned cars.”
CarzSo plans on opening multiple speciality stores, including Superstores in Tier 1 cities (with 300-500 cars inventory), Express stores in Tier 2 cities (with 50-100 cars inventory), and Virtual stores focused on various consumer segments to promote online retail of cars.
Touching upon the topic of how CarzSo is different compared to the competition in the segment, Vaibhav said, “We believe that the pre-owned cars business is about procuring the right quality car at the right price, and we are a procurement-focused business. This helps us to ensure customer satisfaction at its best.” Vaibhav said that the growth in the Indian pre-owned cars market is expected to be driven by the rural sector and tier 2 and 3 cities, which competitors are not focusing on, while CarzSo has built a strong presence in non-metro cities. He added, “We are also working on a strategic tie-up to support our customers with the best financing options, along with the buyback options at attractive pricing.”
The pandemic had varying levels of effect on different businesses, however, “it impacted the pre-owned cars market positively,” said Vaibhav. He said the demand for personal mobility is on the rise, while the global semiconductor shortage is adding to the waiting period for new cars. He added, “The waiting period is ranging from 2-3 months to as high as 12 months for certain models and variants. This is leading to a rise in demand for used cars, while also resulting in a surge in the pricing of pre-owned cars.”
Highlighting a few trends in the used car industry, Vaibhav points out that SUVs are the driving force of the pre-owned car market. “Newer, feature-rich cars, primarily SUVs are driving sales in the pre-owned car market; due to the intermittent launches, SUVs are seeing faster replacement cycles. Intermittent model launches and feature-rich competitively priced vehicles will likely aid the shift towards SUVs in the pre-owned car space,” commented the Founder of CarzSo.
Another trend that Vaibhav feels is interesting is the digital transformation the industry is seeing. He said, “The market will witness a digital push, mainly driven by customers’ preference to limit physical visits for car buying in the wake of Covid. The accelerating trend of digitisation will lead to an increasing share of sales through digital classifieds; digital platforms will gain further traction due to their wide reach, accessibility and ability to provide a variety of options.”