Business Caselet : Making FIRST CHOICE the first choice in used car sales

PRESENTED BY:-

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• Akshay Desai
• Chintan Gala
• Dhruv Anand
• Heena Mittal
• Nancy Tatwani
• Rahul Baid
Company Overview
Mahindra First choice presently works in 810+ cities in India with more than 1700 outlets. Over
the span of two years the company plans to expand the number of outlets to 1800 working in all the metros
and tier 2 countries and towns
1. There are 160+ First Choice franchises offering multiple franchise outlets
2. First choice has sold 250000+ cars with securing payments in just 48 hours
3. Company recorded a healthy sales growth of 40% during the period 2018-2019
4. The total revenue stands at 148 crores for the year 2018-2019
5. For the excellent work done by First Choice, it was the winner of the ‘Retailer of the Year’ award in 2017
6. Franchise of the year 2015 – 17 was also awarded to the Mahindra First Choice

Average age of pre-owned car is 4

years which average ticket size of
Rs. 3-4 lakhs

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Market of USED CARS
• A study done by "Indian Blue
Book" points out that in FY 2018-
50% of used car buyers 19, the pre-owned car market
are in the 25-34 years
age segment has grown steadily and has
crossed the 4 million unit mark
making it bigger than the new
car market
• The North leads the pre-owned
car market in India at 36% of the
used car pie followed by the
West (27%), South (26%) and
East(11%)

Key Players in the Market 3

How will this situation evolve?
Indian Used Car Market Summary

With the increasing trend of

customers looking to buy used cars,
there will be a mismatch in demand
and supply as there is a limited
supply of the same due to the slow
growth of the new cars segment.

2018 2024

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 Sale of Old Demand
Strategy(1/4) Cars of New
Cars

Providing a buyback guarantee to the

customers buying used cars from Mahindra first
choice. One of the primary concerns for people
buying used cars is the prospect of resale, by
providing a guarantee of buyback, more people
would be motivated to buy used cars from an
organized platform like FirstChoice. Reference:
Skoda has a buyback scheme called ‘EasyBuy’

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 Sale of Old Demand
Strategy(2/4) Cars of New
Cars

An interconnected network of outlets which

can gauge local demand for a particular model
or category of automobiles and coordinate the
supply-side mechanics amongst each other to
ensure that there is a balance between supply
and demand.

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 Sale of Old Demand
Strategy(3/4) Cars of New
Cars

Further expansion into the premium used cars

market as demand for the same is high among
an aspirational, brand-conscious younger
demographic especially in metro cities.

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 Sale of Old Demand
Strategy(4/4) Cars of New
Cars

Personalised discount vouchers issued in a

targeted manner. A youngster just learning to
drive would probably buy a used car as his first
car and once he/she trades up for a better
model he/she would use the discount voucher
to buy a new Car from Mahindra

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Financing Opportunities

Pre-owned car finance penetration in India is under 15% while that for new cars is
approximately 65%. This is due to the highly fragmented and unorganised market which
results in higher channel costs for lenders so there is huge potential for both an increase in
participation by organised players coupled with financing products.

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SWOT Analysis

S People will always require vehicles, and for many people their only option when needing a car
is to purchase a used one. The market of used cars in India is increasing year on year. These
businesses have substantial economic stay ,network of showrooms, and with continued
technological changes in the economy - the business model of a used car company continues
to grow.

W The most prominent issue faced by used car dealer company is ongoing competition threats
from other companies in the target market. With the advent of the internet, many people now
conduct their initial searches online for locally sourced used cars. As such, any individual
seeking to enter this business needs to be technologically savvy as it relates to listing vehicles
for sale online.
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SWOT Analysis

O The opportunities for used car dealers to expand their operations is substantial. As such, these
businesses can rapidly expand provided that they acquire quality used vehicles to sell to their
customer base. Finally, many dealerships can integrate their own financing programs for their
customers in order to drastically boost revenues.

T The primary threat faced by the businesses are ongoing competitive issues. As the new car
sales dwindle and user car sales rise, there will be a disruption in the supply chain model in the
future.

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Conclusion

Our solution aims to use the large volumes of people looking to sell their used cars, to stimulate demand for the
new car market and ensure that the increasing gulf between the number of new car sales and used car sales is
reduced to sustainable levels.

The promise of after-sales service and the buyback guarantee on the used cars will result in a shift in consumers
selling their cars on organised platforms such as Mahindra FirstChoice instead of unorganised dealers.

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References:
• https://www.ibef.org/archives/detail/bmV3cyYzNzc5MTcxJjExMA==
• https://www.mordorintelligence.com/industry-reports/india-used-car-
market
• https://www.cars24.com/blog/used-car-market-india-untold-story/
• https://www.thehindu.com/brandhub/disrupting-the-used-car-market-
one-vehicle-at-a-time/article25779964.ece
• https://yourstory.com/mystory/5bffb4eae4-market-for-used-cars-in-india-
• https://auto.ndtv.com/news/pre-owned-car-market-bigger-than-new-car-
market-study-2031976

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Thank You!