A vehicle sells every 10 minutes on e-bay India

The used car business is set to grow at a brisk pace.

With nearly 400 used cars being auctioned online daily on the eBay India Motors Marketplace (eBayIIM), thousands of wholesale car buyers and sellers have gradually started transacting a significant percentage (in some cases almost 45 per cent) of their business on the website.

Over 3,500 dealers from 125 cities in India are registered on this platform where a vehicle sells every 10 minutes "" noteworthy if one considers that a vehicle sells every nine hours on eBay India's business-to-consumer space or retail space.

The number of used cars is set to grow by leaps and bounds, generating an estimated business opportunity of Rs 10,000-13,000 crore.

The used-car volume in India is pegged at 70-90 per cent of new car sales, unlike in some mature markets where second-hand car numbers are almost twice or thrice the sales of new cars.

The estimated size of the addressable market opportunity is close to $2 billion, according to eBay India, the largest in the country India, with an overwhelming majority.

"We are currently at a very nascent stage of the market. To achieve our goals, we will continue to aggressively expand our base of dealer buyers and use innovative technologies and processes to achieve our goal," says Rajan Mehra, country manager, payments and new ventures, eBay India. The average age of vehicles traded on eBay is less than three years.

The sellers constitute banks, NBFCs, corporates, fleet operators and vehicle dealers across India. The names include the likes of HDFC, ICICI, ING Vysya, Kotak Mahindra Primus, Standard Chartered, Citibank, Bajaj Auto Finance and Tata Motor Finance. The fleet operators include Avis (Mercury Car Rentals) and International Travel House.

With the number of used vehicles growing at a rate faster than the sale of new vehicles, it is important for vehicle manufacturers to ensure a good re-sale price. Manufacturers are attempting to create branded organised retail networks for their used vehicles.

"The B2B auction marketplace plays an important role in helping manufacturers achieve their objectives by providing an efficient platform for the liquidation of vehicles," says Mehra.

Delhi-based Rana Motors' Director Rekhi Rana is using eBayIIM to sell vehicles for over a year. "I sell about 50 vehicles every month. This comprises nearly 45 per cent of the cars that I sell in the online and offline mode. I manage to sell cars approximately three days from the date the bidding starts and I get payment within 48 hours of a sale," he says.

This online channel has added transparency to the system and reduced corruption in offline bids for vehicles. Mehra says, "This B2B space is an important link in the supply chain of vehicles. In developed and mature markets like the US, auctions have a large share of the wholesale auto market. One of the key challenges we have faced has been acquiring new dealers in remote areas. These dealers have not previously been exposed to the Internet and we, therefore, invest heavily in training them through eBay Motors academies, localised regional language training and a dedicated toll-free number for customer support."