Automart India to open used-car superstores across the country

10 May, 2007

At a time when supermarket chains are becoming a rage among the consumers in the country, it is time now for used car super marts. The used car
supermarket chains are soon to be a reality, thanks to Automart India, the used car business of auto major Mahindra & Mahindra.

With a view to grow its net profit a cool four times to to Rs 1,000 crore by the turn of the decade, the company plans to open a chain of mega-sized used-car showrooms across the country, said a report. According to the report, Automart India will be experimenting with a superstore concept for used cars which would stock over 200 cars of all makes.

It said the first such showroom will come up at the Mumbai suburb of Goregaon this June. Hoping to sell 200 cars a month by October from this outlet, the company said the chain would redefine the way used cars are bought and sold. The company is looking at the possible success of the pilot project succeeds and if it does, it would replicate the model in other cities, said a report.

The company also plans a mega expansion through acquisition of regionally strong used-car dealers. Automart, which has M&M holding 74 per cent stake, HDFC 15 per cent and car retailer Shah & Sanghi the rest, currently sells about 1,200 cars a month through a network of 75 dealers in 52 cities.

It has been found that the used-car market in India with figures touching 1.1 million cars is almost as big as the new car market, which stands at 1.2 million cars.

Analysts, in the meantime, believe that the biggest challenge for players like Automart is supply and not demand. In a bid to overcome this, the company, is setting up desks at car showrooms to buy cars from those who are upgrading.