Automart plans more outlets in Gujarat

Automartindia has chalked out a major expansion drive in the state. A change in the sales tax structure has prompted such a move, said the company officials.

The company launched its first showroom in Ahmedabad on Friday and will follow with seven more showrooms in five cities in the state.

Automartindia will adopt a franchisee route for expansion in the state.

"The state government's earlier sales tax policy was the singular reason why we had not entered the Gujarat market so far. But now that the anomaly has been removed and we will expand our presence here in an aggressive manner," said Arun Sinha, chief operating officer of Automartindia.

The state government introduced a fixed sales tax of Rs 1,000 on resale of used cars in the Budget for 2004-05. The fixed tax is far lower than the 12 per cent sales tax levied earlier.

Sinha added that the company expects to post a sales worth Rs 50 crore in state in 2005.

The first Automartindia showroom was inaugurated at Neighbourhood Motors, an authorised Hyundai service centre in Ahmedabad. Grace Cars and Manan Motors will be the other two dealers in the city.

Dhruv Motors and President Motors have been finalised in Surat and one each has been finalised in Vadodara, Rajkot and Bardoli.

In the next six months, Automartindia will open showrooms in Bhavnagar, Mehsana, Vapi and Bhuj as well.

"About 10 lakh second-hand cars are sold annually in the country and over 95 per cent of this market is done by the unorganised sector including brokers. But there is no guarantee regarding the genuineness of the cars. At Automartindia, people will get cars at prevailing market rates, with a certification, free services and a warranty," Sinha said.

Maruti Udyog Ltd's TrueValue chain showrooms was the first to enter the state after the government decided slash the sales tax rate.