Tatas may foray into used CV mart

Tata Motors, the country's largest automobile house, is looking to foray into the used commercial vehicle (CV) market through its extensive dealer network in the country.

In a reply to an email query, a company spokesperson confirmed the development.

In fact, over the last two years, the company was said to be studying the benefits of selling used commercial vehicles.

In FY'07, the CV market, including the light-, medium- and heavy-vehicle segments, grew by an astounding 33 per cent. The industry, comprising majors Tata Motors, Ashok Leyland, Eicher Motors and Swaraj Mazda, sold 467,882 units in all. Unconfirmed estimates suggest that during the same period, more than a lakh used commercial vehicles were sold in the unorganised market.

Although the original equipment manufacturers (OEMs) have been getting into the used vehicle market, there are few instances of commercial vehicle makers venturing into the segment.

Ashok Leyland, with a market share of 26 per cent, had recently initiated a move to retail its used trucks through its existing dealer network. The business model, called Altrux, is looking to grab 10-15 per cent of the market share in three years.

The company will source five-year-old trucks manufactured by dealers, and sell them at pre-organised dealer outlets. It claims that these vehicles will cost half of the new vehicles.

Analysts expect the used CV market to grow anywhere between 18 and 25 per cent annually. "With OEMs getting into the used market, consumers will get much-desired product assurance from the manufacturer, similar to that provided by True Value outlets of Maruti. Although it is too early to predict the growth of this business model, the industry itself can grow substantially," added an analyst.

STEERING AHEAD

During FY07, the CV market grew by an astounding 33 per cent

The industry, comprising Tata Motors, Ashok Leyland, Eicher Motors and Swaraj Mazda among others, sold 467,882 units in all

Ashok Leyland, with a market share of 26 per cent, had recently initiated a move to retail its used trucks through the existing dealer network

Auto analysts expect the used CV market to grow anywhere between 18-25 per cent annually