Skoda Auto India, which entered the used cars market with the launch of its ‘Certified Pre-Owned’ programme on Wednesday, aims to sell 10,000 units of used cars — which would be around 20 per cent of its total sales — by 2022.

The programme forms an integral part of the Czech automaker’s preparation for the India 2.0 project, Zac Hollis, Brand Director, Skoda Auto India, told BusinessLine.

Skoda’s 2.0 project with the Volkswagen Group was announced two years ago, with a planned investment of ₹8,000 crore to strengthen the group’s operations in India.

“The first customers that we will attract to our India 2.0 cars in the middle of next year will be our existing customers. That is why it’s very important that we can offer our existing customers a good trading value against those cars. That’s why we rolled this out before India 2.0 so that it’s well-built in and a key part of the dealers business,” said Hollis.

The Skoda Auto vehicles bought under the ‘Certified Pre-Owned’ programme will come with a manufacturer-backed warranty that spans 24 months or 150,000 km (whichever is earlier).

Warranty details

The scheme will also cover vehicles belonging to other brands and can be purchased with a warranty that spans 12 months or 15,000 km. Customers can also trade in their old cars — that may or may not be Skodas — and be rewarded with exchange bonuses for the purchase of a new Skoda vehicle.

The used car programme is also available on the digital platform, and it supports a live consultation suite and a contactless virtual product demonstration option, said the firm.

Due to the pandemic, there has been a shift towards personal mobility, said Hollis, with the earlier focus on shared mobility and public transport being replaced by safety concerns.

“The importance of safety has led to the demand for one’s own personal transport. Not everybody can afford to buy a new car at say ₹7-10 lakh and this has led to an increase in demand for used cars. It is important that we become a part of the used car market,” he explained.

Revenue stream

This would also be an important revenue and profit stream for the dealers, said Hollis. “If we prepare a car properly, there is no reason why we can’t achieve a 4-5 per cent net margin on a used car, which is important for the dealers’ profitability,” he said.

The used cars under this programme will be available at its dealerships in nine cities — Mumbai, Delhi-NCR, Coimbatore, Jaipur, Ahmedabad, Surat, Vadodara, Hyderabad and Goa. The scheme will also be available in five more cities from November 1 — Pune, Bengaluru, Chennai, Kochi and Karnal. By 2021, this programme would be rolled out across all the dealerships of Skoda Auto India, said Hollis.