Skoda Auto India has entered the burgeoning used car space as part of its India 2.0 project wherein its dealers will not just offer certified and refurbished Skoda cars but cars of other brands as well.
The cars bought under the ‘certified pre-owned’ programme will come with a 24 months or 150,000 km manufacturer-backed warranty. The programme will also house non-Skoda automobiles carrying a 12 months or 15,000 kms warranty
Moreover, customers can trade in their old car (that may or may not be a Skoda offering) and benefit from exchange bonuses for the purchase of a new Skoda vehicle. The India 2.0 project involves launch of a range of new cars starting with a mid-size SUV in 2021.
Zac Hollis, Brand Director, Skoda Auto India, said, “The used car business should represent a good revenue stream for our dealers and they don’t have that at the moment. The reason why we are venturing into this is because our whole organisation is preparing for India 2.0. We have been in India for 20 years and there are enough Skoda cars in the market to roll out the used car platform.”
The Czech car brand will start off with Mumbai, Delhi (NCR), Coimbatore, Jaipur, Ahmedabad, Surat, Vadodara, Hyderabad, and Goa in Phase 1 before adding all the remaining dealerships in less than 18 months to the used car platform.
Five more cities will start operation by start of November and by 2021 all its dealers will be part of the programme. Skoda started 2020 with 65 outlets and will finish the year with 100 outlets, before adding another 30 by June next year.
“I am expecting that customers for our new 2.0 Skoda cars – SUV and notchback – will be existing Skoda customers. This platform allows for a good exchange offer to these car owners. People will be ready to pay the premium on our used cars knowing that each of our Skoda car is sold after a 160 point check and carrying a two-year warranty,” Hollis added.
Although there is no official data source for used car market in India, the market size is estimated to be 1.5-2 times the new car market. Since the start of lifting of the lockdown in June, used car dealers have reported a surge in demand due to preference for personal mobility over public or shared mobility.
Almost every car maker in India has ventured into the used car space, with the largest operation run by Maruti Suzuki (True Value) and Mahindra & Mahindra (Mahindra First Choice). Volkswagen entered this space a few years ago under the brand Das Welt Auto.
Although the operation will entirely depend on the dealer, Skoda aims to sell cars that have run for less than 1 lakh km. The plan is to sell over 10,000 use cars by 2022.
“If the dealer has four-to-five year old car coming in, which is run for less than 1 lakh kms, then it represent a good value for refurbishment before resale,” Hollis added.