General Motors to enter used car market as “Chevy OK”

General Motors (GM) India, a wholly-owned subsidiary of US-based General Motors Corporation, is all set to enter the Rs. 300 billion used car market. The used-car retail initiative is named as Chevy Ok, will be rolled out in all the metros and “B Class” cities in five weeks, the company said.

Karl Slym, president and managing director of GM India, said the pilot project was launched in New Delhi a few weeks back. “The project was successful and now the company is planning to launch the business across the country,” he said.

To start with, the company will set up Chery Ok through its 10 dealers. This would be gradually increased. P Balendran, vice-president (corporate affairs), GM India, added that by the end of this year, the number of outlets will be increased to 25. The outlets would sell only GM vehicles and each of those will go through 114 checks, Balendran said, adding the customer would get guarantee up to six months.

The B Class cities where the company would set up the outlets include Hyderabad, Bangalore, Jaipur and Lucknow. “Going forward, the company would tap the tier-II and III cities,” he added. “The Chery Ok concept would bring in additional revenue for the dealers, while for the company it would increase the volumes,” according to Balendran.

The company will be the latest entrant to the space after Hyundai, Mahindra and Mahindra, Maruti among others. The used car market in India is fragmented, with more than 80 per cent of it controlled by the unorganised segment. The market is expected to grow at 12-15 per cent in the next five years to touch a robust 2.5 million units and a turnover of Rs. 50,000 crore.

The current slowdown has opened doors for used car business, says Balendran. “This would be the right time to enter into the business since the customer has experienced the credit crunch. A segment of those customers have traded their requirements down. And those who have traded their requirements down, still end up buying a used car.”

Speaking about the sales-point expansion, Balendran said currently the company has 195 check points and 198 authorised services across the country. By the end of this year, the company wants to make it 250 each.

GM India sells cars like the Chevrolet Spark, Chevrolet U-VA, Chevrolet Aveo, Chevrolet Optra, Optra Magnum, Chevrolet Tavera and the Chevrolet Captiva

Source: Business Standard