According to several surveys, the pre-owned car market in India is 1.2 times the new-car market, which saw three million unit sales last year
Maruti Suzuki India Ltd (MSIL), which set up Nexa stores to sell premium cars, is using the similar strategy for used-car business too.
Under its ongoing revamp, the company plans to set up 300 standalone dealerships in next three years.
It already runs a used-car business called True Value, but it's part of the conventional showrooms. The new vertical will also be called True Value.
"In the first phase, we are planning to set up 150 dealerships this year and we will ramp it up to 300 dealers in the next two to three years," said R S Kalsi, senior executive director-sales and marketing at MSIL.
As per the company estimates, about 70% of customers opt for the used-car upgrade to the new one within two years of purchase.
For MSIL, about 30% of the inventory for the used-car business comes from the exchange by customers while buying a new vehicle.
According to several surveys, the pre-owned car market in India is 1.2 times the new-car market, which saw three million unit sales last year.
In comparison, the Chinese used-car market is less evolved at 0.5 times, albeit at higher volumes.
Kalsi said it was difficult to ascertain the size of the unorganised used-car market.
The players in the online pre-owned cars business are just data collectors, who pass on the leads to brokers, he said.
According to the MSIL officials, the focus on used-car business was also to cater to a large number of two-wheeler owners who may want to jump to the four-wheelers.
He said that sale of pre-owned certified cars for the company has grown to 22% in the last fiscal from 10% three years ago, and is expected to reach 30% this fiscal.
Most of the passenger car companies were already into the used-car business.
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