Home-grown used car player Mahindra First Choice Wheels (MFCW) aims to double its revenue in the ongoing fiscal year on the back of rising demand for used cars due to an increase in demand for personal and safe mobility, a top company executive informed Mobility Outlook in an exclusive interview.
The company sold 2.4 lakh units in FY21 and plans to sell three lakh vehicles in FY22.
Ashutosh Pandey, MD & CEO, Mahindra First Choice Wheels, said, “We continue to make serious investments on the tech side. On the physical side, we plan to grow our Autokart Refresh bulk auction model aggressively apart from the rapid expansion of our MFC outlets. We aim to outperform our last FY numbers and grow our revenue 100% YoY.”
The company is confident of outperforming FY21 numbers as it ended FY21 with growth in revenues of 20% despite the lockdown and related business impact Q1.
The pandemic has been an intense period of growth for the used car market. The used car market is projected to grow by 7.1 million units by FY2025.
The total industry sales in FY21 was at 3.9 million units, a slight dip compared to 4.2 million units in FY20. Factoring in almost zero sales during Q1 of FY21 during the pandemic, it is clear that there has been a strong rebound in growth from Q2 onwards.
“We saw a strong growth in average monthly volumes last fiscal in the operational months,” Pandey added.
Last year the company launched 50 new franchise stores across India amid a growing preference for personal mobility. It expanded into states like Haryana, Uttar Pradesh, Rajasthan, Bihar, Maharashtra, West Bengal, Punjab, Kerala, Tamil Nadu. It has currently 1,180 outlets and plans to 100 outlets every quarter.
Pandey believes that it is one of the next big opportunities because there is still a large part of the unorganised market, and consumers’ trust in digital transactions, even for high-value purchases, is growing fast.
The used car market is progressively getting organised. In 2011, the total share of industry volumes by organised players was barely 10%. At the end of FY20, 21% of the industry is organised.
The organisation’s pace is gathering speed, and “we expect 32% of the industry to be organised by FY25,” said Pandey.
The used car market segment is getting organised due to numerous factors such as customer demand for trust and price transparency while buying and selling used cars. Besides, consumers’ increased adoption of digitalisation has forced unorganised players to follow standardised vehicle inspection and list them on popular portals and investments.