In a bid to sustain the flow of sales volume and customers, the Indian subsidiary of Skoda is gearing up to foray into the pre-owned car business by the end of 2012. Volkswagen Group, which owns the brand, has already made an entry in the used car business with its 'Das WeltAuto' division. Though Skoda has a strong line-up of models in the Indian Auto market, the company has not been able to perform as anticipated despite being present in the country since 2000.
Managing Director, Skoda India, Sudhir Rao, said, “We are working on putting in place a comprehensive growth strategy to penetrate deeper into the country with our range of products. We will not trigger discount wars to boost numbers but we are working on entering the pre-owned cars business to introduce more customers to our brand by the end of the year.”
With the launch of its new models, Skoda Rapid and Fabia, the car maker managed to bring in decent volumes, however, the company has been plagued with low sales ever since its entry into the Indian market. In order to boost its sales in India the car maker is pacing up to increase its dealership network to 150 outlets from present 102 by 2014-2015.
The Czech car maker has lined up an investment worth Rs. 300 crores in order to increase the localisation of its products and slash the cost of ownership. This move is aimed at increasing the sales significantly to touch the anticipated volume of 1.5 million units sold worldwide by 2018.
The used car market in the country is 2.7 million units strong business, with more than 85 per cent of the market being controlled by the private dealers. Majority of the car makers are entering the used car business these days to provide better deals and exchange discounts to the customers. Through their used car businesses the companies assist the customers in completing the transfer of the old vehicles, assist in the maintenance and also offer warranty on the used cars.
The car manufacturers are concentrating on the pre-used car business as well in order to ramp up their sales in the Indian market. This is because the sales of new cars have been shadowed by the higher interest rates, hiking fuel prices and slow economic growth. According to an analyst, “The pre-owned car business units not only provide dealers with opportunities to improve margin by selling used cars, the company additionally registers sales of new vehicles through exchange programmes.”
The Czech car maker under the Volkswagen Group is also planning to introduce more products in the sub-Rs. 4 lac category of Indian auto market. With the presence of highly successful models like Hyundai i10, Maruti Suzuki A-Star, Ritz and Ford Figo, the small car segment is clearly one of the most happening categories in the industry.
