Mahindra FirstChoice Wheels aims to double sales this year
MUMBAI: Mahindra FirstChoice Wheels Ltd, the used car arm of Mahindra Group is looking to double sales in the current fiscal and add to its sales network as it expects demand for pre-owned vehicles to remain robust on back of strong new car sales, company’s top official said in an interview.
The Mahindra group company sold 225,000 used cars in the year that ended in March and expects it to reach the 550,000mark by the turn of the current fiscal, said Nagendra Palle. chief executive at the firm in an interview on Wednesday.
On back of healthy volumes, the unlisted entity turned in a profit after a gap of three years. The company is also looking to raise another round of funding in the next one year as it plans to scale up expenditure on marketing and sales promotion.
“Last year, we had around 80% growth and this year we are on track to almost double our volumes “said Palle. The multi brand used car business will be raising another round of funds, which would primarily deployed in building the brand and digital technology. On back of a strong volume growth, Mahindra First Choice Wheels turned in a profit at the profit after tax (PAT) level after a gap of three years Palle
Mahindra, which entered the used car business in 2008, began with outlets that were owned and operated by the company and started converting them into franchises in 2014. Seven years, since Mahindra got into the space, the used car market in India has exploded.
At 3.3 million units, India’s pre-owned car market is growing at over 15% a year, while the organised segment is advancing at 25% plus every year, according to a study by Indian Blue Book (a vehicle pricing guide).
The study released last year, leveraged India’s largest footprint “on the ground” via the Mahindra First Choice. Market for secondhand vehicles in India said. Abdul Majeed, auto practice leader at PWC, expects used car sales to continue outpacing the new ones owing to the low car penetration of 21 per thousand, shrinking life cycle of a car and low per capita income.
The proliferation of the internet and e-commerce boom that has spawned raft of technology based firms in the used car space, has also added heft to the market. But Palle doesn’t consider them as competition. “Most of these companies are classifieds which are only used for search and research. Nowhere in the world are cars bought online,” he said. These portals, at best will generate leads, while actual transaction will continue in the