CarDekho Group plans to invest $20 million in used car business this fiscal as it forays into selling pre-owned vehicles through its upcoming franchise retail network, the company said on Monday.
The Girnar Software Pvt Ltd-owned venture, also a leading vehicle search platform, plans to open 250 franchise stores this year and ramp up this network to over 1,000 retail locations by 2022. The franchise outlets would be branded CarDekho Trustmark stores.
Used cars are seeing a surge in demand as buyers are increasingly opting for budget-friendly personal transport while avoiding public transportation due to covid-19 scare.
According to Amit Jain, co-founder and chief executive officer, CarDekho, used car transactions for every new car sold would increase from 1.3 in FY20 to over 1.8 during FY21 as commuters are increasingly opting for personal mobility at a lower cost.
Announcing its foray, the company said it has launched its first franchise store for sale of certified used cars in Jaipur. The next upcoming stores are planned in Delhi NCR and Bengaluru respectively, it said in a statement.
The company already operates over 50 CarDekho Gaadi stores across India where it acquires used cars from their existing owners.
CarDekho stores would be part of the fast penetrating organized channel in the pre-owned segment, similar to that of Maruti Suzuki True Value, Hyundai Motor’s H-Promise, Mahindra First Choice Wheels, Honda Auto Terrace, Toyota U Trust, among others, said a consultant, requesting anonymity.
CarDekho said its Trustmark stores will offer a similar user experience that buyers get while visiting a regular new car showroom.
“Our pre-owned cars are checked for more than 200 parameters that includes previous accidents, tampering of odometer, among others. In a recent pilot project carried out in Delhi, only 30 out of 100 cars could meet the Trustmark criteria,” Jain told Mint in a phone interview.
“We don’t take used cars that are driven more than 90,000 kms and are more than 9 years old,” he added.
The company also plans to provide financing and insurance options to its customers at the Trustmark stores. “We disburse car loans of about ₹120 crore per month,” Jain said.
With about 4000 used car inspections per month currently, Jain said his used car business is faring better than the pre-covid levels.
“CarDekho Gaadi stores are operating at higher run-rate currently,” he said.
Earlier in June, CarDekho reported that its digital platform saw a 99% recovery in customer traffic for used cars after the lockdown wherein cars in the ₹1-5 lakh range saw maximum traction.
This article was first published on livemint.com