Tata Motors Ltd said it would focus on strengthening and scaling up its used car business ‘Tata Assured’, amidst market speculation that the company could enter into the brand agnostic used car business like Maruti’s ‘True Value’ and Mahindra’s ‘First Choice Wheels’ by October this year.
“Tata Motors through its ‘Tata Assured’ vertical has a strong presence in used car industry with over 150 outlets pan India. It has been helping Tata Motors dealers to exchange vehicles and also provide certified used cars,” a Tata Motors spokesperson said, responding to a query on a differentiated service offering under a new brand.
“While we continue to explore various opportunities in the used cars space, at this stage there is no additional information to share. We will continue to focus on strengthening and scaling up ‘Tata Assured’ and reinforcing customer centric initiatives” the spokesperson added.
During the pandemic, the used car market has received traction in metro cities with people preferring a low cost, used car rather than a brand new one for personal transport, following the suspension of metro rail and local train services. Additionally, the fear of contamination through other modes of transport has created demand for personal mobility.
According to industry officials, a robust used car business by an automaker also helps in enhancing dealers' income when new car sales have been impacted due to economic slowdown and spread of COVID-19.
When the future is uncertain, the income from used car business has the potential to help in meeting overall costs of the dealer besides aiding the main business to get traction.
In July, new car sales declined 4% year on year to 1,82,779 units as against 1,90,115 units, according to SIAM data.
On the other hand, the used car market is believed to have sold more cars as the ticket size is small. No comprehensive sales data is available because this segment is highly fragmented and mostly unorganised.
