Mahindra First Choice Wheels Ltd, the company dealing with the used cars of multi brands, is to invest Rs100 crore as the capital expenditure for the expansion in next three years. With this investment the volume of outlets will be 300 from the current 103, said its CEO. The expansion will be phased on tier1 and tier 11 cities starting from urban and reaching the rural sectors. The company is quite happy with its share of 8% in the organized used car market and the target is Rs500 crore within this fiscal.
The country’s used car estimate is 1.5-1.7 million units per year with a profit margin of 8% and about 10% of this entire market is organized one. The used car industry is growing at 20% but Mahindra has attained 60% growth by selling some 10000 cars last year which the company expects, might reach to 18000 this year. As the expansion plan has started the company plans to reach the 1 lakh mark by 2014. For more feasibility for the buyers, the company is initiating tie-ups with banks and financial institutions for speedy loans and lesser interest rates. Mahindra itself has the Mahindra Finance Ltd and a special tie-up with Syndicate Bank offering loans @9%, which is half of what other banks charge for cars of organized market.