Shriram Transport Finance rolls out Automall near Chennai

Just off the Grand Southern Trunk Road, the highway (NH-45) that connects Chennai to the south, on the 68th km stone from the city, Shriram Transport Finance Company, the country's largest truck financing company, launched its first Automall in Pukkathurai village on Saturday. The Automall is a one-stop shop for buyers and sellers of second-hand/pre-owned commercial trucks, tractors, tippers and the like to meet and conclude their deal through a transparent process.

Place to stop-over

It takes a little under two hours to get there from Chennai — the perfect stop-over place for the average truck driver/owner —– either as he is entering the city or exiting it — and have a look at what is on offer.

Given that 70 per cent of the 6-million odd trucks running in the country are driven by single truck owners — who typically graduate from being a driver to owner — and often nurse ambitions of growing into a fleet operator, this looks like a place that will launch a few more dreams. The place measures about 5 acres, a huge yard where about 100-odd trucks of every variety are lined up in neat rows. Most of these trucks (between 5 and 7-years-old) are of Tamil Nadu registration, while a few are from the neighbouring States. Many of them are repossessed vehicles from defaulting borrowers.

INSPECTION

Even hours before the formal inauguration, a steady stream of buyers and hopefuls throng the open yard, climb on to some trucks, examine the interiors and exteriors, knocking a few body parts, examine the tyres etc., to get a feel of the vehicle — without driving it. I ask a group of men from the nearby town of Tindivanam, about what makes them go for a pre-owned truck, and take the risk of buying a vehicle that might have weathered much abuse at the hands of its previous owner.

One man, in his mid-forties, very likely a small fleet operator and leader of that group, gives me an once-over and pronounces with finality, “You haven't spent much time in the sun. For me, this is my daily routine – I have been in this business for thirty years'. Even as I wonder if a little more tan would have helped get him talk more, he proceeds to enlighten me, “If I go for a new truck that is going to cost me around Rs 18 (lakh). This truck will cost me only about Rs 6 lakh. Maybe I can even beat the price down further.”

What about maintenance issues? He continues, even as his eyes take in everything about the vehicle in a few seconds, and briskly ticks off the items that need replacement, “There is some more money to be put in for sure. The front tyres are OK, but I think the set of rear tyres (4) need replacement. That's about Rs 1.20 lakh. Maybe a new battery, some mechanical repairs and a little bit of paintwork; so I'll have to invest about Rs 2 lakh more after I pay for the truck. But I can still run this for at least 10 years more and easily recover my investment.” And then proceeds to instruct one of his underlings to make a note of the vehicle number, the card number and make a bid for it in the auction at the Automall the next day. And it certainly helps that finance from STFC is available at about 18 per cent and insurance too is available from a group company.

More outlets

Within the next month, three more such Automalls are to be set up outside Mumbai, Delhi and Baroda. And the company has plans to open at least 50 more such outlets. Mr P. Chidambaram, Union Home Minister, while inaugurating the Automall, complimented the Shriram group for enabling a number of truck drivers turn owners and enabling them to stand on their own legs.

Interest rates

Mr R. Sridhar, Managing Director, STFC, said that interest rates for old vehicles had come down by half from levels of about 40 per cent over the past two decades. He said this helped operators replace their fleet more often, thereby bringing down the average age of vehicles and in the process helping the economy also.