Auto cos take pre-owned route to drive sales

KOLKATA: Auto majors from Toyota Kirloskar, Honda Siel, Hyundai Motors to General Motors India are expanding their pre-owned car business to spruce up their new car sales under the exchange programme. While Toyota Kirloskar plans to sell 25-30% of its compact car Etios, which will be launched next year, through its used car outlets, Toyota You Trust, GM and Hyundai, are aggressively pushing their existing models through their pre-owned car outlets. Talking to ET, Mr Sandeep Singh, deputy managing director (marketing) at Toyota Kirloskar Motor said: “We now have five outlets of Toyota You Trust. Within the next three years, we plan to have 50 outlets. Our aim is to sell 25% of our new cars through Toyota You Trust. We are already selling Innova and Altis through the used car exchange programme. We are expanding our used car outlet footprint, keeping in mind the launch of our compact car, Etios, next year. Toyota You Trust will be one of the major avenues for selling Etios.” With advances in technology and a record number of new car models entering the Indian market every year, customers today typically go for an upgrade or exchange within three years of their purchase, compared to the timeworn ideology of sticking to the same car for 10-15 years, auto industry analysts said. The used car segment is witnessing growth owing to factors like increasing number of OEMs entering pre-owned automobile industry, favourable demographics, the changing lifestyle of Indians and user choice. Mr Sunil Gambhir, head of AutoTerrace, the used-car arm of Honda Siel, said there are 117 Honda AutoTerrace outlets across the country. “In AutoTerrace, we have exchanged more than 4,300 preowned cars for new cars and liquidated them through various channels. In about 70% of the cases, the customer needs exchange at the time of buying a new car. So, AutoTerrace helps the new car department at Honda to present a complete package deal to the customer by buying the used car of the customer,” said Mr Gambhir. Mr Gambhir feels that though the second hand car market in the country is equivalent to the new car market at about 13 lakh plus, in future, it may surpass the new car market. “Our used car programme, Chevy OK, is doing very well. In the first six months of this year, we have already sold/exchanged close to 1,200 cars. We intend to sell at least 2,500 cars through this channel in 2010. It brings in incremental sales volume as the customer is given a one-stop shop experience to trade in a car, old or new. Although we had sold all models through this programme, the maximum numbers have come from the sales of Spark and Beat,” said Mr P Balendran, VP, GM India. Arvind Saxena, director, sales and marketing at Hyundai Motors India, added: “As for the volume, we do around 15% of the total sales through those dealers who also have the Hyundai Advantage dealership. Used-car sales, we expect, will grow at the same rate as the new car sales. Santro is the most popular model sold through the exchange programme.” Source : Economic Times    (7/25/2010)