KOLKATA: Auto major Mahindra & Mahindra controlled second hand vehicle arm Mahindra First Choice Wheels Ltd is expanding at healthy pace of over 25 per cent.
"We are expecting a growth of 25-30 per cent in sales of second hand cars under Mahindra First Choice in FY 15'. We aim to end with 1.4 lakh vehicles against 1.1 vehicle last year," Mahindra First Choice Wheels Ltd CEO Nagendra Palle told PTI.
He said second hand vehicle industry was also expanding at a healthy pace of around 15 per cent and that the high growth phenomenon will continue.
"In developed market, second hand car business is at least three times of new car. In India we are just crossed the ratio of 1:1," said Palle who was in City to inaugurate 401 authorised dealer Mukesh Automotive in City.
"We are witnessing sharp expansion of our footprint, we will end with 500 outlets nationwide and this would go up to 650-700 in FY16'," said the top executive, who returned India two years back after a stint of 24 years in US dealing with used car market.
The used vehicles market is also getting organized though now is just not more than 20 per cent of 2.5 million vehicles a year, Palle said.
He said tools like used cars pricing guide using analytics and auto inspection will be the drivers to both retail and bulk customers for the company's brand.
The high margin of 8-10 per cent in second hand against 4-5 per cent for new cars is also driving new entrepreneurs into this trade," the CEO of the multi-brand certified used car company said.
Palle sees similar opportunities in dealing withcommercial vehicles which is at a nascent stage. He declined to divulge revenues of the company which is entirely fee-based for the services it renders.