Pre owned growth story defies slowdown

faster pace than its American or European counterpart. This opens up avenues for venture funding in emerging entities, not withstanding the current slowdown.’

Amoudru’s assessment was echoed by Sierra Ventures, a Silicon Valley based venture capital firm with over $1.5 billion worth of funds under its management. It invested about $7 million in Carwale.com which has taken the used car business to the online domain. Tim Guleri and Vispi Daver of Sierra Ventures will now join the company’s Board of Directors. Carwale had earlier received seed stage funding from an early stage fund — Seedfund. Managing Partner, Seedfund, Pravin Gandhi represents the firm on the company’s Board.

‘Our partnership with Sierra Ventures will launch a very exciting era for our organisation and we are proud to have attracted a top tier Silicon Valley venture capital firm focused on India to help us build the company,’ informed CEO, Carwale, Mohit Dubey. Again, it’s not a unique business model. Online process in automotive retailing have been tried and tested in the west. In India however, the scale of the volumes combined with a lack of certification processes have traditionally mired the used car dealer into controversy. Hassled consumers are often trapped into buying accident borne or once water-logged cars backed by fake documentation. ‘Sound process and resilient business models are the need of the hour. There is room for a fair degree of consolidation in this space,’ added Dubey.

Experts however argue that the Carwale and Sierra Ventures is just about sinking in and whether the honeymoon will extend into better deliverables is a query only time can answer. Mahindra First Choice for instance, has also seen a 45 percent increase in sales this year. The company aims to sell over 20,000 used cars this year. Said President, Aftermarket, M&M, Rajeev Dubey, ‘We have embarked on our long term mission to unlock value in the aftermarket vertical and spearheading out efforts in that direction is First Choice Wheels.’

The retailer announced grand plans of targeting 1,00,000 vehicle sales per annum by 2013 through over 300 outlets. This will include 30 Franchise Super Stores, each of which will have a stock of over 200 cars on display. For that it received Rs 80 crore from Phi Advisors, which is promoted by Anupam Thareja and P Sivaram. Sources, in the aftermarket vertical of M&M, who preferred not to be identified, however claim that the going has been ‘extremely tough’ as very few franchisee queries have come through.

Talking about processes, a quick visit to the very first First Choice outlet at a western suburb in Mumbai revealed the lack of organisation. While ‘ground zero’ is enough to baffle a reluctant consumer, the website is no good. It is largely inaccessible through browsers other than standard Internet Explorer and various modules offering transactional options are non-functional.

That for an entity claiming first mover advantage in the organised used car domain is indeed not a fitting attribute.