Maruti Suzuki to reboot True Value business

In a bid for dominance of the used-car market, Maruti Suzuki is rebooting its True Value operations by setting up independent True Value outlets and allowing customers to check the inventory on mobile through an app.

As a part of Maruti Suzuki’s transformation, a network of independent True Value outlets will be set up across the country, with a larger display area for a variety of pre-owned cars of Maruti Suzuki.

These outlets will be digitally integrated through a portal so that customers can access details of all the cars available at the outlets.

Maruti is also launching new mobile apps to allow consumers to check the available used cars before venturing out to a showroom.

True Value business is not just an additional revenue generator but also a means for selling more of its new cars.

“About 30 per cent of people selling their old cars at True Value end up buying a new Maruti Suzuki car in exchange,” Tarun Garg, Executive Vice-President and Head of Marketing at Maruti Suzuki, told BusinessLine .

To ensure quality and reliability, Maruti Suzuki said it will buy the pre-owned cars based on a strict criterion such as the car shouldn’t have changed more than two hands, the cars shouldn’t be more than seven years old and so on. The selected cars will then be refurbished at Maruti Suzuki workshops and offered to customers with one year warranty and three free services.

Maruti Suzuki currently has about 20 per cent share of the organised used-car business, but the sales have been stagnant at about 35 lakh units a year for the last three years.

The situation is expected to get worse as post GST, the tax on used-cars has been set at 28 per cent from 12 per cent previously.

There is, however, no GST on peer-to-peer selling of cars. This puts the organised sector at a huge disadvantage.

Maruti Suzuki, however, downplayed the impact of GST. “We are quite buoyant with GST effect on Indian economy, car sales and so on. SIAM (auto industry body) has made a representation to the government on the tax rates. So let’s see what happens,” Garg said.

Maruti will focus its efforts on certified cars, Garg said. This will ensure better margins even as the company offers more reliable used-cars.

Certification of a car is an exhaustive process which starts with evaluation of the car on 376 check-points.

The refurbishment and service requirements are also identified during evaluation. Then the car is refurbished at Maruti Suzuki workshops.

Currently, only about 22 per cent of used-cars sold by the company are certified. Maruti expects that figure to go up to 30 per cent by end of the current financial year.

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