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May 5, 2001
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Money > Business Headlines > Report May 5, 2001 |
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Mahindras portal to set up big used-car retail chainAnusha Subramanian and V Phani Kumar Even as the debate over the import of used cars rages, automobile major Mahindra & Mahindra is planning to milk the domestic second-hand cars mart, which sees an estimated sale of 1.2 million vehicles annually. The group's auto portal, Automartindia, has finalised plans to open the largest dealer network for used cars. Currently, the Mahindras have 57 per cent stake in Automart, with Housing Development Finance Corporation holding 22 per cent and Bombay-based automobile dealer Sah & Sanghi holding 11 per cent. The balance 10 per cent is held by employees. This is first in a chain of 48 dealers that is being set up across the country by March 2003. Ford Assured from Ford India is currently the only other known used-car outfit with more than one outlet. Daewoo Motor India is the other company known to be planning a foray into this business. Vinay Sanghi, chief of Automartindia, said, "The used-car market is very unorganised, as there is no national chain at present. Also, the choice available to customers is limited. We want to change that, by adding a physical presence to our portal. In five years, the market is expected to grow at 10-12 per cent per annum. We want to achieve a nine percent market share by March 2003." Set up with an initial investment Rs 250 million, the company plans to rake in additional funds from financial institutions. Automartindia plans to have a mix of its own and franchisee outlets. By end of December 2001, the company will have 22 outlets across Delhi, Bombay, Pune, Bangalore and Madras, Sanghi said. However, an auto analyst at a leading financial institution said, "Even large players from the organised sector will find it difficult to garner a huge share in the used car business initially, as there are already a number of smaller players with well established businesses. However, over a period of time, through a better service and network, they could make their presence felt." Powered by YOU MAY ALSO WANT TO READ:
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