Reliance Retail & Honda Siel used-vehicle market space

Mukesh Ambani-controlled Reliance Retail, is planning a second-hand car market venture on the lines of Maruti`s True Value and Mahindra`s Automart, reports Business Standard. The venture marks an addition to its plans to set up multi-brand car servicing stations at its retail outlets and its auto finance business. Reliance Retail, plans to cover 1,500 cities with over 1,500 supermarkets and 1,000 hyper-markets.

Reliance Retail, is in talks with Corghi SpA, an Italian automotive firm, to offer customers at its outlets vehicle servicing facilities. Corghi manufactures tyre changers, wheel balancers, wheel aligners, and lifting and testing equipment. Industry estimates, put the annual second-hand car market at 1 million units, almost as big as the new-car market (1.3 million units). Both markets grew 20% in 2006-07 and are expected to grow at 20 to 25% in the coming years.

Now, on the other hand, Honda believes there is a wide acceptance of premium cars in India and that more and more people are willing to buy mid-size cars, where its models City and Civic are popular.According to estimates, the used car market in India stands at around 1 million units, almost as big as the new car market. However, almost all of it is in the unorganised sector. Of the 2 lakh units organised segment, Maruti sells 90,000 second-hand cars through its 210-dealer strong True Value network. Hyundai Advantage, Ford Assured, Automart India—a JV between Mahindra & Mahindra, HDFC and Sah & Sanghi—and a clutch of other auto websites are the other players in the organised segment with a minor share of the market.

Honda has formed a new team entirely focussed on the programme ‘Auto Terrace’ and will highlight it aggressively in new marketing campaigns across the country. “We have had this programme for some time but now we have decided to focus on this aggressively. A specialised team has been formed within the company to take care of this business that will have close interaction with dealers and their marketing teams,” Honda Siel Cars India Senior General Manager Jnaneswar Sen told FE here.

Honda will not only buy old cars of any brand from people who wish to upgrade to the Honda badge but will also sell second-hand Honda cars to people, offering them some limited warranty and benefits.

Source : Financial Express & myIRIS

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