[Aditya]

Skoda India has revealed that it plans to get into the used car business this year. The company may launch a few pilot projects in Delhi and Mumbai.



Skoda sold about 15,500 vehicles in 2014 and aims to sell about 17,500 units in 2015. The company believes that the entry into the used car business will help it boost its sales through exchange programmes.

Internationally, Volkswagen, Skoda's parent company, uses the Das WeltAuto brand for its used car business. However, the final call on the brand strategy for Skoda's used car business in India is yet to be taken.

Skoda has three sedans and one SUV in its India product portfolio. It does not have plans to expand this line-up at the moment. The company does not even plan to offer any discounts to push sales of its cars.

A number of manufacturers, from Maruti Suzuki to Mercedes-Benz are into the used car business in India. Other companies from the Volkswagen group, such as Audi and Volkswagen, have also set up used car programmes in the country.

Source: Economic Times

[alpha1]

Is used car business that profitable?
I always thought it to be one where loads of cash gets locked up in working capital. And there is immense competition (it is almost free market).

Or perhaps they are thinking about selling value (Skoda assurance) along with the used vehicle and charge a premium.
It is not clear whether they will keep all vehicles in its stable, or will it be only VAG.

[Rajeevraj]

I don't think the used car business makes much sense for brands like Skoda and VW. They first need to sell enough new cars. Otherwise how will they get enough used cars to sell.

Although VW has a used car brand, in the few times I enquired, they never had anything to sell.

A lot of used car buyers will be first time buyers and am pretty sure very few people would want to go with a Skoda used car.

I think they should focus on improving their product portfolio, sales and after sales before venturing into used cars.

[svsantosh]

Werent they already?

Or may be its a ploy to put some kms into unsold lemons and push off with a lesser warranty headache.

But, if this is a plan to get more customers, I find it hard to see how this will materialize!

[lamborghini]

Originally Posted by alpha1

Is used car business that profitable?
I always thought it to be one where loads of cash gets locked up in working capital. And there is immense competition (it is almost free market).

I think it depends on the model. There are businesses that rely on commission (brokerage), and those that rely on turn around. Profits are to be had as there generally is a huge buffer these guys keep (they generally quote significantly lower than market, and price significantly higher than market value), and depending on the vehicle - turnaround time isn't that bad.

Originally Posted by Rajeevraj

I don't think the used car business makes much sense for brands like Skoda and VW. They first need to sell enough new cars. Otherwise how will they get enough used cars to sell.

Although VW has a used car brand, in the few times I enquired, they never had anything to sell.

A lot of used car buyers will be first time buyers and am pretty sure very few people would want to go with a Skoda used car.

I think they should focus on improving their product portfolio, sales and after sales before venturing into used cars.

I would think that VW, and Skoda would be in high demand in the used car space owing to the premium badging, and reliable diesel engines (maybe not the gearboxes). The only fly in the ointment being the maintenance cost a used car owner may have to shell out if the car is not maintained properly - and that is where Skoda's used car department will swing into play by making sure the car is inspected properly and perhaps even providing warranty for a bit.
This would also allow Skoda to sort off control the resale value of their vehicles which might just make it a win-win.

[isiv]

Why they would not use these energies to change their dubious quality/dealership/post sales service image is beyond me. Instead they want to open up more venues to make scapegoats of customers. May God help those who fall into this trap.

Sorry to play doubting thomas, but the used car landscape is so littered with unscrupulous set-ups, skoda seems such a perfect fit to be there...

PS: I do not own a skoda and my opinion is based completely on info available on online fora.