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R. Y. Narayanan

COIMBATORE, Oct. 10

MARUTI Udyog Ltd (MUL), which made an entry into the used car market about a year back as part of its strategy to expand its market reach, opened a `Maruti True Value' outlet in Coimbatore on Thursday, making it the first MTV outlet in Tamil Nadu.

There are already 12 MTV centres dealing with used car sales in the country and the 14th outlet will be opened in Chembur in Mumbai on Friday, the MTV dealership in Mumbai.

The basic idea is to make MTV outlets a one-stop shop where the intending sellers of Maruti vehicles get the best value for their money and could opt for buying a new Maruti vehicle in exchange.

The buyers of used cars are assured of product quality, genuineness of ownership of vehicles coming up for sale and get financing options at interest rates lower than the market rates for used cars, according to a senior MUL executive.

Speaking to Business Line here today, he said the used car market in India, in terms of ratio, was much less compared to the developed nations. In India, the new car-used car ratio was 1:1 whereas in the developed nations it was 1: 2.39, which meant that the used car markets in developed countries were almost two and half times larger than the new car market. In India, during last year, the total car production was about 5.75 lakh units and it may be presumed that around the same number of used cars changed hands.

A large number of buyers who took car loans of 4-5 years duration look for fresh purchases or for upgrading from one segment of the car market to another at the end of the loan period.

The MTV outlets provide such clients the platform for a hassle-free changeover.

Answering a question about the number of used cars that have been bought/sold through these outlets, the source said it was in October 2001 that Maruti first opened its MTV outlet and in the past one year, close to 20,000 enquires had been processed.

The source pointed out that customers coming to these outlets were able to get the highest price for their vehicles compared to what they would have got from a used car broker.

When asked whether the stipulation that Maruti vehicles coming for sale should be less than four years old or should have logged less than 60,000 km (whichever was earlier) was not a limiting factor, particularly for non-corporate owners, he said it was a learning process for MUV in the used car business.

Probably these rules may be modified over after sometime as there were vehicles older than four yearswhich were in better shape.

The MUL executive said his company was open to the idea of establishing more MTV centres in Tamil Nadu if it was confident of achieving the critical mass as huge investments had to made by the dealers to run them.

Mr Asokan Muthuswamy, Managing Director, Sree Saradhambal Automobiles Pvt Ltd, Coimbatore, a Maruti dealer who has been given MTV dealership, said Maruti would have its own engineers at the outlet to evaluate the cars coming for sale and certify the cars after they were refurbished to meet the Maruti standards.

Each vehicle would carry a one-year warranty or for 15,000 km (whichever was earlier) and three free services that could be availed of anywhere in the country in authorised dealer outlets.

This option was available only to new cars earlier.

He said Coimbatore had a flourishing second hand car market and the average number of cars coming for sale was around 50-60 in a month.

Of this only about one third was sold through organised re-sellers, with the rest being sold through brokers.

With the entry of Maruti in the re-sale market, a fair deal for both the sellers and buyers would be ensured.

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