Bengaluru: On the back of buoyant sales of used cars in India, Gurugram-headquartered tech-enabled used car company Cars24 is investing heavily on growing its presence across the country, and on improving its back-end technology, according to a top company official.
Gajendra Jangid, co-founder and chief marketing officer of Cars24, in an interview to Mint, said that the company sells 13,500 cars a month, on an average, across India. The number of used cars they sold in September, he pointed out, is higher than the total number of new passenger vehicles sold in India, that month, by several leading car manufacturers, outside the top three.
“Whenever sales of OEMs dip, the activity in the used car market increases,” said Anil Sharma, associate director at Markets and Markets, a market research firm. “India is a developing market, and affordability is an issue, when compared to developed markets. When affordability takes a hit, new car sales dip. At the same time, the aspirations of the vehicle buying population do not take a hit. People tend to go to the used car market, instead of the new car market,” he said.
Sharma added that whether the economy is buoyant or not, “on any given day, the used car market volume is roughly three times more than new car sales.”
Jangid felt that the current slowdown in the Indian economy is temporary, adding that there is a lot of room for growth in the car market.
Spurred by its current pace of growth and demand for its services, Cars24 has increased its presence in India from 25 to 50 cities this year, and will be in 25 more cities by the end of 2019. By then, the company will have 200 branches, including in Tier 2 and 3 cities, he added.
Cars24 sells pre-owned cars online through its proprietary auction platform. Jangid said the company is investing heavily on developing the technology. “We want to improve the efficiency of our pricing mechanism. We are bringing in Machine Learning at the back end to reduce errors and to help us derive better yields from each auction,” he said.
Cricketer Mahendra Singh Dhoni recently invested an undisclosed amount in Cars24. Other investors in the company include Sequoia India, Exor Seeds, Apoletto, Kingsway Capital and KCK, a statement said.