More organised players are jumping into the used car market. But problems are aplenty; and solutions... tough to come by!
Here’s another plain Jane who has of late begun to acquire Cinderella status in Indian economy. And the fairy godmother for pre-owned car mart (or used car market) in India is the shortening product life cycle of automobiles in the country. Consider this: In FY’06, the pre owned car mart touched a figure of 8.8 lakh cars, while just a year later, in FY’07 – the figure shot up more than 30% to over 1 million cars – and that is nearly equivalent of the number of new cars sold every year! If that was not enough, the potential is only going to skyrocket; as product life cycles go down further. Small wonder that almost every auto major is making a mad scramble to get into the used-car biz. Maruti, Hyundai, Ford & M&M are already into the second hand cars business and others like General Motors India, Porshe & Bentley are so onto follow suit. Here’s a peek at what the potential of this segment is spawning in desi car mart: Automart (now First Choice) made waves recently when this Mahindra & Mahindra subsidiary proposed setting up about 80 retail outlets throughout the country to buy and sell used cars in an ‘organised’ manner.
Here’s another plain Jane who has of late begun to acquire Cinderella status in Indian economy. And the fairy godmother for pre-owned car mart (or used car market) in India is the shortening product life cycle of automobiles in the country. Consider this: In FY’06, the pre owned car mart touched a figure of 8.8 lakh cars, while just a year later, in FY’07 – the figure shot up more than 30% to over 1 million cars – and that is nearly equivalent of the number of new cars sold every year! If that was not enough, the potential is only going to skyrocket; as product life cycles go down further. Small wonder that almost every auto major is making a mad scramble to get into the used-car biz. Maruti, Hyundai, Ford & M&M are already into the second hand cars business and others like General Motors India, Porshe & Bentley are so onto follow suit. Here’s a peek at what the potential of this segment is spawning in desi car mart: Automart (now First Choice) made waves recently when this Mahindra & Mahindra subsidiary proposed setting up about 80 retail outlets throughout the country to buy and sell used cars in an ‘organised’ manner.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist)
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