What kind of expansion plans do you have for this business?
We have announced a rollout across four locations in the Indian market in the first phase, but we are aiming to take this venture to close to twelve locations by the end of December 2010. The company expects that close to 10-15% of its sales volumes will be contributed by second-hand cars by 2011.
Unorganised channel remains the biggest challenge for the industry’s players, who are trying to establish authorised pre-owned car arms in India. How do you plan to tackle that?
Close to 90% of the total sales that take place in the second hand car market happen through the unorganised route. As far as the unauthorised dealers are concerned, a consumer who is investing a huge amount of money to buy a Mercedes, will like to buy it from the authorised channel. But there many one-to-one deals that also happen in the Indian market. However, we will make the consumer aware of the importance of the authorised channel and will try and take some significant amount of business away from the unorganised sector in the domestic market.
But BMW announced its plans to enter the used car business last year itself. So have you lost out on the opportunity to become a first mover?
Truly, I don’t know what BMW had announced. But even if BMW had not launched its second-hand car arm in India so far, we would have! It was just an announcement from BMW, while we have already entered India with a second hand car arm.
BMW even announced its plan to launch a car financing arm. Aren’t you planning something along those lines?
We are planning to open our own car financing arm, but the proposal is still under consideration and it will take some time.
BMW aims to first tap the metros with its finance arm. Are you also looking at Tier I locations?
No. We will announce a national roll-out, but there is still some time left before we actually go ahead with it. 70% of our sales come through the financing route, and therefore it’s a very lucrative opportunity to tap consumers across India.
We have announced a rollout across four locations in the Indian market in the first phase, but we are aiming to take this venture to close to twelve locations by the end of December 2010. The company expects that close to 10-15% of its sales volumes will be contributed by second-hand cars by 2011.
Unorganised channel remains the biggest challenge for the industry’s players, who are trying to establish authorised pre-owned car arms in India. How do you plan to tackle that?
Close to 90% of the total sales that take place in the second hand car market happen through the unorganised route. As far as the unauthorised dealers are concerned, a consumer who is investing a huge amount of money to buy a Mercedes, will like to buy it from the authorised channel. But there many one-to-one deals that also happen in the Indian market. However, we will make the consumer aware of the importance of the authorised channel and will try and take some significant amount of business away from the unorganised sector in the domestic market.
But BMW announced its plans to enter the used car business last year itself. So have you lost out on the opportunity to become a first mover?
Truly, I don’t know what BMW had announced. But even if BMW had not launched its second-hand car arm in India so far, we would have! It was just an announcement from BMW, while we have already entered India with a second hand car arm.
BMW even announced its plan to launch a car financing arm. Aren’t you planning something along those lines?
We are planning to open our own car financing arm, but the proposal is still under consideration and it will take some time.
BMW aims to first tap the metros with its finance arm. Are you also looking at Tier I locations?
No. We will announce a national roll-out, but there is still some time left before we actually go ahead with it. 70% of our sales come through the financing route, and therefore it’s a very lucrative opportunity to tap consumers across India.
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM B-School
Arindam Chaudhuri
Rajita Chaudhuri
Planman Consulting
