by Sumana Sarkar, Autocar Professional
Manvinder Singh of Bir Credit Solution is a used car dealer in the Delhi-NCR region. They have an average stock of 30-40 cars and their monthly transactions exceed 200 cars, if business undertaken by sub-dealers is also considered. Bir Credit Solution is a one-stop shop for those interested in used cars offering them a comprehensive package including finance options.
Can you detail your journey thus far?
We used to have an old family motor finance firm since 1982. I joined that business in 1984 and finally started the used car business in 1995. It was a gradual shift to used car dealing from motor financing, given the rising prospects of the used car business. Now we undertake business worth nearly INR 5 crore on a monthly basis.
What do you think would be the implications of the Vehicle Scrappage Policy on the used car business?
We will no doubt see more old cars going for scrapping but we are unlikely to see any major impact of these policy details on the used car business at the moment. We are awaiting more details on how OEMs will offer 5 percent discount and what will be the base price on which discount will be offered.
What is the demand situation for used cars at the moment?
We are selling about 30-35 cars a month. Demand is upbeat and there has been 20-30 percent growth in used car demand between August 2020 and now. If you compare from pre-Covid levels, we have seen 20 percent growth overall.
Has the supply stabilised now compared to the past few months?
The supply situation is still a little bit of problem. Though cars of various ticket sizes are available, we see greater supply of entry level cars as compared to premium cars. The delay in supply of new cars is impacting used car supplies to a certain extent.
What is the average ticket size for used cars?
We are seeing good traction for cars priced between INR 5-10 lakh, especially mid-sized sedans. Even SUV models in the INR 10-15 lakh bracket also witnessing good demand.
What are the type of models/segment that are seeing maximum traction in used car segment?
On an average, we are seeing brisk sale of Hyundai Verna and Honda City. Demand for the Toyota Innova Crysta and Hyundai Creta is also quite good.
How easy is the availability of loans for used cars now?
It essentially depends on the customer profile. But overall, the loan situation is a bit difficult, primarily due to Covid-led disruptions.Nearly 60 percent of customers who come to our showrooms opt for loans and 40 percent prefer cash down.
What type of digitisation are you seeing in used car segment?
Digitisation is driving most functions in the car selling process after markets opened post-Covid. We are seeing that physical interaction in terms of processing has gone down but time for processing has gone up. The time required to complete paperwork has come down significantly due to digitisation but the penetration is still not huge. Overall, we see only 30 percent customers prefer online buying.
How many check-points does a used car typically go through at your dealership?
We check all key details in a car like the odometer, mileage and ensure that a vehicle is non-accidental before selling them to our customers. We also undertake some mandatory refurbishment of the cars before selling them, depending on their condition. Additionally, we also undertake special sanitation process now to make cars Covid-safe.
What is the average age of a used car at your dealership?
We mostly stock used cars that are around 5-6-years old. On an average, we have noticed that most customers prefer that 4-yearold cars or those near that age profile.