Comments
Those selling their old cars no longer need to worry about their vehicles ending up in the wrong hands, while still being assured of the best price. Such is the promise of the one-year-old online vehicle auction company, MotorExchange.in.
The e-commerce Web site, arguably the first of its kind in the country (to conduct sales through auction), has already done transactions worth Rs 1,400 crore. It targets individual sellers as well as firms selling fleets of cars and commercial vehicles. However, only registered used-vehicle dealers can be the buyers.
"In 3-4 years, we expect to do $1 billon (Rs 4,497 crore) worth of transactions on our platform. Our model avoids sellers a lot of pain as they can be sure of the best price through the auction process, plus be assured of quality based on our inspection report. We charge only 2-4 per cent as transaction fees," said Mr Vinay Sanghi, Founder and CEO, MotorExchange or MXC Solutions India.
Assured payments
Sellers can also be assured of payments as all dealers (buyers) registered with the company have to pay a deposit when they register on the Web site. Large firms selling vehicles account for as much as 70 per cent of its business which has 25 such clients, including major NBFCs and banks. At present, MotorExchange auctions up to 7,000 vehicles a month.
With the domestic auto market expected to grow at 15-18 per cent in the next few years, the company believes that such platforms will become even more relevant. MotorExchange expects to invest up to Rs 36 crore in the platform, largely on marketing and human capital. It will hire 160 more professionals by March 2012, taking the headcount up to 250.
"The used-car market is at 2.5 million units a year and is growing at 15-20 per cent. The used truck market is also at one million a year. As the market develops, platforms such as these would be needed for consumers. There are no other companies currently in this space, though we have competition from the large unorganised sector," said Mr Sanghi.
To tie up the last chain of used car sales to end individual buyers, the company has also acquired a used and new car sales Web site CarTradeIndia.com. Since MotorExchange only sells to dealers, the new Web site would also enable these dealers to sell vehicles to the end customer.
MotorExchange has attracted investments from venture capitalist firms, Canaan Partners and Epiphany Ventures. Besides Mr Sanghi, the other promoters include Mr Rajan Mehra, former Country Manager for eBay India and Mr Austin Ligon, founder of US-based car sales Web site CarMax.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.