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K. Giriprakash

Bangalore , June 13

SINCE its foray into the pre-owned truck market in India, Volvo has sold over a 100 units within a year, which is nearly one-third of the new Volvo trucks sold last year.

A Volvo spokesperson told Business Line that certain customers have even started building their Volvo fleet on used trucks. "Used trucks' price and demand levels are today at a healthy and strong level," the spokesperson said.

He said though over 100 Volvo trucks exchanged hands last year, their sale would even out over a period of time. Trucks which are between three and five years old get into the used truck market. Volvo is in its eighth year of operations currently and has sold nearly 3,000 trucks.

"As the market develops further, it is certain that we will further gear up our focus in this area of activity," the spokesperson said.

The spokesperson said there is a set of customers who chose to opt for used trucks because of initial constraints on capital cost and those who want to test their logistics.

Used trucks are also preferred by those who have limited contracts that demand short periods of operating cycles. Once it starts yielding results, they start buying new trucks, the spokesperson said.

Typically, used trucks, according to a truck finance company, costs half the price of a new truck, which ranges between Rs 35 lakh and Rs 50 lakh.

Volvo follows a different kind of business model for its used truck. Though it has a separate division for the business, it follows a hands-off approach in certain aspects of the business. Volvo does not buy or sell trucks from customers but acts as a facilitator between the seller and the buyer and charges a certain fee for its role.

However, on the request of the sellers, it re-conditions these trucks and charges the seller for servicing them. The spokesperson said Volvo has a data bank of used trucks and buyers can access them for their needs. Volvo offers the same after-sales support and driver training support as in the case of new trucks, though it charges a certain fee for its services.

According to a truck financing company, interest rates on loans for buying used trucks are higher than those for buying new trucks.

But those which have higher credit rating tend to get extremely attractive interest rates.

He said Volvo's used trucks carry a premium because they have a longer lifecycle span.

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