Honda Motorcycle & Scooter India (HMSI) is keen to enter into this profitable business.
The ‘used car’ market is a very popular one and now the popularity of used bikes is on the rise, too. HMSI has spotted this juicy market and is now gearing up to make a full-throttle approach into the ‘used bikes’ business. There are several of these all over the country, but seldom are they organised and trustworthy. HMSI wants to take advantage of this very flaw in the system and is hot on the hooves to strengthen its ‘Best-deal’ network which, at present, sells pre-owned Honda motorcycles and scooters. HMSI has recently collaborated with Shriram Automall to lend offers on financing of pre-owned motorcycles and scooters.
Pre-owned, or used cars, are a booming business across the world, especially so in India. HMSI thinks that the same will apply for the two-wheeler segment. Top brass in HMSI seem certain of the growth prospects of this business. Yadvinder S Guleria, VP-sales & marketing, HMSI, said, “HMSI is a comparatively new company in the two-wheeler market and our pool of vehicles is now at a stage when the pre-used business can take off. Ownership period for a two wheeler has come down from 7-8 years per vehicle a decade ago to 5 years right now. In a couple of years the pre-used business will grow and we see this as a long term growth opportunity.”
HMSI seems hell-bent on taking advantage of this golden opportunity that has presented itself. We think this will only strengthen the two-wheeler segment as buyers of pre-owned two-wheelers can now rest assured on their purchase without having to worry about the credibility of the dealership. “We have a separate vertical within HMSI to handle the ‘Best Deal’ operation which is our pre-used business,” said Guleria. He continued, saying, “Our target is to have more than 100 Best Deal outlets in the next 12 months.” For the time being, HMSI handles 60 dealers as part of its network and they have setup separate ‘Best Deal’ outlets. Needless to say, being a part of HMSI ensures that all the vehicles that exchanged and refurbished in these outlets, are done so according to Honda’s strict quality standards. They also offer warranty support for 6 months and the initial 2 services of the vehicle will be free.
“Currently HMSI sells 20,000 units per annum through Best Deal outlets. The tie-up with Shriram Automall will enable HMSI to clock 350,000 units in three years. Including the unorganized sector, the second hand two wheeler sales is around 50% of new two-wheeler sales,” said Guleria. India currently sees sales of around 13 lakh new two-wheelers leaving dealerships every month, whereas pre-owned two-wheeler sales stand around 6 lakh units per month. “HMSI’s share of this market is around 2-3% less than the industry average,” said Guleria.
Source: ET