Maruti, Toyota, M&M remain positive on long-term growth of used car business
As the country continues to reel under the second wave of Covid-19, the various sectors of the economy struggle with stagnation, especially the automobile industry which saw pause in production, but a few automakers showed some confidence for the future. Maruti Suzuki India (MSI), Mahindra & Mahindra and Toyota Kirloskar remain positive on the long-term growth prospects of their respective used car verticals. Executive director of sales and marketing Shashank Srivastava of MSI said that given the current scenario it is difficult to predict the performance of used cars this fiscal year. “Demand for such cars is there in the market but there is pressure on their availability because of restrictions across states on account of lockdowns and curfews,” he was quoted as saying by PTI.
The company has 570 True Value outlets across the country with a certification facility of pre-owned cars that are taken from various sources including customers who can exchange their old cars for new Maruti models. He also added that about 416 out of these have seen a slump in their businesses. Srivastava stressed that demand for the used cars is still very strong due to a shift towards personal mobility, but to make these available now poses a challenge. Maruti Suzuki India saw a drop in the sales of pre-owned cars by around 36 per cent last fiscal at 2.65 lakh units from 4.18 lakh units in 2019-20. The company sold 4.22 lakh units in 2018-19, 3.54 lakh units in 2017-18 and 3.46 lakh units in 2016-17. Srivastava said that the brand is already seeing this pattern repeat itself in April and May. As per the report, he also added that if the situation improves the sales of new cars will go up. Currently, MSI is focusing on the digitisation of its outlets to make buying easier for customers.
Toyota Kirloskar Motor (TKM) seems to be on the same boat as the company finds it difficult to assess the growth of the company now but remains hopeful. Vice president Naveen Soni said, “There was a semblance of normalcy during the period January to March 2021, in which we saw a more than 40 per cent jump in used car sales compared to the corresponding period last year. Therefore, we have a positive outlook, based on how the pandemic situation improves.” Soni highlighted that many customers are not planning to trade their old cars for a new one. The automaker saw a 17 per cent dip in used car sales as compared to last year.
The home-grown automaker Mahindra & Mahindra (M&M) remains confident about the growth of the used cars in the near future. Mahindra First Choice Wheels MD and CEO Ashutosh Pandey said that the company is currently making some serious investment in the technology department. “We continue to make serious investments in technology. On the physical side, we plan to grow our Autokart Refresh bulk auction model aggressively apart from rapid expansion of our MFC outlets. We aim to outperform our last FY numbers and grow our revenue 100 per cent year on year (YoY),” he said. He also added that the business grew by 60 per cent between FY19 and FY20 and despite the loss in the first quarter of 2021, the overall business grew by 20 per cent.
(with inputs from PTI)