Financial Daily from THE HINDU group of publications
Tuesday, May 24, 2005
Financial Daily from THE HINDU group of publications Tuesday, May 24, 2005 |
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Corporate
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Announcements Automart to bring out first Blue Book on used cars K. Giriprakash
Bangalore , May 23 USED car major, AutomartIndia, plans to bring out the country's first Blue Book, a reference guide consisting of pricing details and history of each used car in the country. AutomartIndia also plans to float an IPO in a couple of years with Mahindra & Mahindra, which holds around 75 per cent stake in the company, expected to increase its stake by another 5 per cent and 10 per cent, the company's Chief Operating Officer, Mr Arun Sinha, told Business Line. The Blue Book, an extremely popular guide among the US used car buyers, is a resource for anyone who wants to buy, sell, or trade in a used car. The Blue Books consists of original list prices, vehicle identification numbers, retail value and track record of the vehicle. It also consists of a table of acceptable mileage range by year and tips on buying a used car. The list of used cars in the metros is expected to be ready in a year while a comprehensive book on all the used cars in the country will be available in another year. Mr Sinha said the organised sector in the used car business, which constitutes a mere 5 per cent is expected to grow to about 95 per cent in another five years. He said the organised sector was growing at about 20 per cent every year. While in the US, the used cars volume was around 36 million compared with 19 million new cars' market, in India, the ratio was equal at about 10 lakh cars each. "But within a few years, the used cars will outnumber those of new cars' market," he said. He said the used cars were growing at about 20 per cent compared with 15-17 per cent growth of the new car market in the country. Mr Sinha said AutomartIndia's pricing of passenger cars is based on a market survey, which is conducted every 15 days to determine the purchase price of the cars. "While we base the purchase price on the market survey, the selling price is determined by the demands of the market," he said. He said in value terms, the selling price of an used car on an average is around Rs 2.5 lakh per car. He said used cars fetch the most in Bangalore. Mr Sinha said the AutomartIndia sells about 1,000 used cars every month, which is expected to grow to 3,000 in another three years. The company currently has 60 outlets, which will go up to 100 by the year end. AutomartIndia's latest outlet was opened in Bangalore recently and is the third such outlet in the city.
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