India: CarDekho plans to invest $20m in used car business in FY21

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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

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.