Mumbai: General Motors Corp.’s Indian arm will sew up within two months its plan to enter the 1.5-million unit domestic used-car market, a senior executive said on Thursday.
“We are close to finalizing our plans and would be rolling out the initiative in the next 30-60 days,” said Ankush Arora, vice-president for marketing, sales and after sales at General Motors India, or GM India. “With the throughput of our monthly car sales and customer base having increased substantially over the years, I think its very important to be in this business.”
Arora called the initiative “one of the biggest priorities” for GM India this year.
Unlike car makers such as Hyundai Motor Co. and Honda Motor Co. Ltd, which sell only their own brands in their used-cars outlets, General Motors plans to retail other brands as well in its pre-owned car showrooms.
While this would give the company a wider customer base, it will also offer buyers a variety of options to choose from, added Arora, who did not divulge a sales targets or how much the company would invest in opening used-car outlets.
The used-car market in India is fragmented, with more than 75% of it controlled by the so-called unorganized segment. While the second-hand car market is growing at a rapid pace, supply of quality cars is an issue, industry analysts say.
“One of the reasons why we see more players entering the segment is because of the quality issues related with second-hand cars,” said Mahantesh Sabarad, analyst at Centrum Broking Pvt. Ltd. “Moreover, there are also concerns about servicing and genuine paperwork.’’
GM India plans to establish retail outlets for pre-owned cars in a phased manner, starting with the metropolitan cities. The company will be the second in the country after Mahindra and Mahindra Ltd (M&M) to run a multi-brand used-car business.
M&M’s First Choice second-hand car business aims at cornering at least 5% of the market by 2012.
GM India has been riding high on the success of its entry-level compact car, Chevrolet Spark.
It sold 5,706 units of the Spark last month and plans to sell 40,000 units by the end of this year, after its second facility in Talegaon near Pune in Maharashtra opens next month.
Arora said the Spark will continue to be the company’s entry level compact car offering, even as it gears up to bring more small car models in the coming years.