With the Indian used car market set to touch the five-million mark in vehicle sales over the next four years, online vehicle auction company MotorExchange.in is eyeing a fourfold increase in transactions at over $1 billion by 2015.
Vinay Sanghi, founder and chief executive officer, MotorExchange.in said, “The penetration level of vehicles in the country is low at about 10 cars per thousand people. With economic growth, aspiration levels are on a rise and we expect to see an increasing number of two-wheeler owners opt for pre-owned cars. We aim to cross $1 billion in sales by 2015.”
MotorExchange, which has been in operation for 15 months now, auctioned 70,000 vehicles in the last financial year, registering gross transaction value of around Rs 1,200 crore. In the current financial year, the company is looking at auctioning around 150,000 vehicles with sales of Rs 2,400 crore.
According to industry estimates, currently, around two million pre-owned vehicles are sold in the country per year. The industry is valued at over Rs 40,000 crore. The segment size is, however, insignificant when compared to that of the United States, where around 44 million pre-owned vehicles are traded every year.
“In India, the issue is that trade in used cars is largely unorganised. We provide a platform where both corporate and individual consumers can register their vehicles. The cars are then purchased through an online auction by used-car dealers across the country. We offer certification on the vehicles sold and the sellers get the best price for their cars”, explained Sanghi.
MotorExchange charges a transaction fee ranging from 1.75 per cent to 4 per cent from corporates such as banks and insurance companies on sale of products. In case of individual consumers, the transaction fee is levied on the buyer. The company has tied-up with 17 leading banks including HDFC, ICICI, Kotak Mahindra, NBFCs, insurance companies and sells vehicles to 17,000 dealers across the country. The payment gateway is secured by means of a deposit fee dealers have to pay while registering on the website so that there is no default on sales.
MotorExchange sells only to registered dealers at present, but the company has acquired used and new cars sales portal CarTradeIndia.com to cater to individual consumers. The company has raised four rounds of funding till date with investments having been made by venture capitalist firms Canaan Partners and Epiphany Ventures.
