Automart eyes larger share of used car mart

Automartindia Ltd, a major player in the organised used car market, aims at a larger share of the used car market by expanding its presence across the country.

The company plans to expand the number of showrooms from 65 to 100 by the year-end and is aiming to double its turnover to Rs 500 crore by the end of 2005.

Arun Sinha, chief operating officer of Automartindia who was in Ahmedabad to inaugurate the first Automartindia showroom in Gujarat, the company today sells about 1,000 cars per month, five times higher than what it used to sell in 2001.

"By 2006, Automartindia should be selling about 2,000 cars a month. But still this will be a small volume of the total used car market in the country," Sinha said.

According to estimates, the used car market in India is as huge as the new car market, which means that between 9 and 10 lakh used cars are sold every year. But in countries like the US the used car market in countries is double that of the new car market.

"Currently, about 98 per cent of the used car market is handled by brokers, but things are changing rapidly and this is evident from the fact that Automart intends to double its sales in 2005.

"We posted a turnover of about Rs 250 crore in 2004 and are confident of doubling this figure in 2005," said Sinha.

Commenting on the pricing of the vehicles, he said that cars sold at Automartindia showrooms will be priced at market rates, with the added advantage of being completely refurbished, having a warranty and free services.

On the method of procuring cars, he said that Automartindia purchases these from individuals, but purchases from corporates is picking up fast, as most corporates replace cars provided to their officials, on a regular basis.

"Last year, we purchased 1,000 cars from Hindustan Lever Limited and have similar purchases from other corporates as well," Sinha said.

Automartindia is promoted by the Mahindra group in association with HDFC and Sah and Sanghi group.

The Mahindra group has a stake of 75 per cent in the venture, while HDFC has 15 per cent and the remaining ten per cent is with the Sah and Sanghi group and employees, said Sinha.

Automartindia began as a website to facilitate buying and selling of used cars , but opened its first five company owned used car outlets in the year 2001.

Since then, it has expanded its presence to 65 outlets across the country, with the remaining 60 being through the franchisee model, where Automartindia and the franchisee sharing revenues.