With sluggish sales market of new cars, Toyota Motor Corporation is now banking on second-hand market. In this regard, the Japanese carmaker will auction used cars, a practice it follows globally, to expand business in India."Toyota's mission is to make the Indian used-car industry more reliable and transparent to customers. With this in mind, we are launching Toyota Auction Mart in September 2015 in Bengaluru, where every used car from all brands will be inspected by Toyota trained professionals and certified before the auction," a senior company executive told Economic Times.
Toyota auctions vehicles in other countries through its own companies.
Like other carmakers, Toyota also has a used-car business operating under Toyota UTrust, which was launched in 2007 and covers 56 markets in 19 states.
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The auction facility will come up in Bidadi, a town located on the Bengaluru-Mysore expressway, designed for efficient operations.
"The company engineers would be rating all the cars on 203 parameters to assess its worth and price for the auction. This would be different from the current practice of dealers buying older cars and then disposing of them in an unprofessional way," the company executive told ET.
As per industry experts, the used-car business is about 1.3 times bigger than the 2.5 million new cars sold in India every year and growing at a faster rate.
Toyota sales of 141,347 vehicles in FY15 gave it a market share of a little over 5% in India. The company sold 34,300 vehicles in the first quarter, a 9% growth from a year earlier.
In India, the segment is largely underdeveloped and is dominated by the unorganised sector, which corners more than 80% of the used-car business.
(Image: Reuters)