Mahindra First Choice Wheels (MFCW), the multi-brand used car business, is preparing the ground for a great leap forward that will include expanding beyond the major metros.
14 Apr 2015 | 2693 Views | By Brian de Souza
Mahindra First Choice Wheels (MFCW), the multi-brand used car business, is preparing the ground for a great leap forward that will include expanding beyond the major metros.
Explaining this strategy, Shiv Kiran, head of business strategy, MFCW, told Autocar Professional said this includes expanding the number of retail outlets ...
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Mahindra First Choice Wheels (MFCW), the multi-brand used car business, is preparing the ground for a great leap forward that will include expanding beyond the major metros.
Explaining this strategy, Shiv Kiran, head of business strategy, MFCW, told Autocar Professional said this includes expanding the number of retail outlets from 500 at present to 700, putting in place a state-of-the art technology platform and offering more products and features. The ‘Beyond metros’ game-plan includes the setting up a new format aimed at penetrating further into the potential used car market.
MFCW was recently in the news when it received an infusion of funds from San Francisco-based Valiant Capital Management. Kiran says the used car market is a multi-growth phenomenon and the funds received will be leveraged to put in place the above-mentioned strategy.
India’s used car market is largely an unorganised business. As a pioneer in the business, the company sold about 140,000 vehicles in the last fiscal which includes passenger cars, CVs, tractors and construction equipment. About 25 percent of them constitute passenger cars. This market in India is estimated at about 200,000 vehicles of all sizes and variants and, by its nature, is a very local market.
In order to bring about more transparency in this market, MFCW had brought out the Indian Blue Book, a ready-reckoner on used car prices. The company also has a similar product for tractors and is close to bringing out a product for commercial vehicles.
Recently, MFCW tied up with State Bank of India, one of India’s largest lenders, for new cars in which the SBI branches will use the Indian Blue Book to reach out to their customers. SBI typically funds the purchase of over 30,000 cars a month.
MFCW runs its multi-brand business on the franchise model. While the National Capital Region is the biggest market, in terms of outlets, the company has its largest number in Maharashtra at 71 outlets.
According to Kiran, the average ticket size for used car purchases at MFCW is in the region of Rs 400,000 as against the industry average of Rs 150,000. According to the company, 60 percent of buyers are first-time buyers.