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10th February 2011, 10:52 | #16 |
BHPian | Re: Feasibility of a *pre owned* Car Dealership Just to add a little bit of trivia, Bernie Accleston started of as a used car dealer. |
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10th February 2011, 10:58 | #17 | |
BHPian Join Date: Jul 2010 Location: Mumbai
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| Re: Feasibility of a *pre owned* Car Dealership Quote:
I guess with the production of 800 stopped, the True Value delaership may even fetch over Rs. 200,000/- for this vehicle in the lext two years. The fact is, with the entry of these manufacturing companies in the Pre-Owned sector, customers are being taken for a ride. They give absoultely no explanation for these astronomical prices, calling it True Value certified. Bring in more clarity in the business as to the prices and the vehicle condition in general. When i sold my 2001 accent, the first thing i pointed out to the prospective buyers was the problems with the car and then went to with the condition and service history. In this Pre-Owned segment the returns will be good provided you are able to convince the owner that you are selling him a car that is worth his money and do not let him feel cheated. | |
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10th February 2011, 11:47 | #18 | ||||||
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership First of all, let me start with a big thank you for putting my thread up onto the portal! second of all, thank you so much for your overwhelming replies, provides alot of support/confidence in an endeavorer if at all i plan to take it up, it's definitely encouraging with the response out here.I would like to let you guys know that i don't plan to offend anybody with my replies, It's just my point of view that you guys may or may not agree with. I've taken all your replies with a positive learning spirit and hope to make the best use out of them.Please find my replies in bold to each of your comments Quote:
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And as far as buying cars, body work is concerned, I need capital for that, I can't ask my father to finance this whole project without a proper business plan, and neither can i approach a bank,Also, I would need a place to sell the cars that i refurbish,I like the idea, I just can't do it, Let me give you an example, My friend has a 2004 forester,little less than 50k done, that he's looking to sell, mechanically perfect, it needs new tyres, power windows, and new upholstery, I can't convince him to make that investment into the car before selling it, and he's not expecting much for it either, but I can buy it from him for about 4lakhs, do the required refurbishment for about 40k,and sell it at about 4 75-5lakhs? even if i did work on it worth 40k,and sold it for 4.50? i would still make 10k off it, but the question is, from where do i finance this, and whom do i sell it to? whereas, if i had a place, the whole process is a whole lot easier, I completely respect your views sir, I'm just letting you know why i can't do it[/b] Quote:
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I agree, there are alot of other ventures that can be thought off, but i figured that with something like this, I'll probably make a little less money as compared to another business,(if done right, there's alot of money involved here too, given the sheer volume) but think of it this way, I'll be around cars for 10hours a day, be involved in restoring/refurbishing them,and we all know how we wait for our beauties to come back from the service station, the pleasure is simply umatched!) and ill be able to drive different cars everyday(atleast sometimes Quote:
Once again, Thanks for all the responses/encouragement, Really appreciate it! Last edited by Mpower : 10th February 2011 at 23:03. | ||||||
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10th February 2011, 16:59 | #19 |
Senior - BHPian Join Date: Sep 2009 Location: Pune
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| Re: Feasibility of a *pre owned* Car Dealership My few cents: 1 Try to make sure that you buy car which is single owner. People like to buy single owned cars when it comes to buying a second hand car. Multiple owned cars generally people dont like & fetch less value. 2 Buy only those cars which you are getting at good rate & fetch you more. I have seen some rich people buy new cars & sold there old ones at available rates (mainly cash) as parking space is the issue in big cities. 3 Try to keep more popular cars with you which are most in demand. Like Santro, Swift, Wagon R etc. Keeping cars like Optra, Skoda etc is big risk, as not many people of these class like to buy second hand. Your money can get blocked for months also. 4 Make sure that people believe you. That is most important. If people feel that you are not genuine guy, people simply don't buy. You should make sure that people believes you. One more point, building very good network is the key to success in any business. You should know as many people you can so that your business will grow. With good network u can easily get good customers. All the best Raghav. Start business soon. Last edited by aniketi : 10th February 2011 at 17:03. |
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10th February 2011, 17:11 | #20 |
BHPian Join Date: Jul 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership I'll just sight one example from what I've learnt about the market of pre-owned car market of Bangalore (assuming you'll start out from Bangalore). I was actually planning to buy a used WagonR or Santro about 6-7 months back for under 1.5 and trust me I couldn't find one in Bangalore at all. Even the 1999/2000 model owners/dealers were asking for 1.8 to 2.2 for such old cars with 70-80K+ oddo-meter reading whereas Carwale suggest the price ranging from 90K to 120K (most of the cars had usually 2-3 owners already). I would have thought about 140k, but they just charged way too much. And now I've finally decided to go for a new car after a year when I get my appraisal. So what I want to know is how do you plan to convince such owners who over-value their car by at least 20-30% and then when I come to you expecting a fair deal wouldn't you add another 5-10% to the value of the already over-valued car? Just curious. P.S.: If you already know someone selling a WagonR/Santro below 1.5L to 1.6L lemme know. I'll be your first customer. Last edited by creative420 : 10th February 2011 at 17:13. Reason: more info |
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10th February 2011, 18:00 | #21 | ||
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership Quote:
2)some cars of the first category would come into this, like i said, the maruti's, hyundai's, toyota's, hondas, which are known to be reliable, last about 2,00,000kms, will have takers, I can buy low with the fact that they have two owners 3) i agree, the maruti's would be most money making and i would intend to start with them, gradually and eventually moving to bigger brands like honda and toyota, as someone said earlier, i'd loose a lakh for every 3months i'd keep a high priced german 4) Well, that's why i was thinking of going the franchisee route, because for me to build a name for myself would take forever, and given the investment, i'm not sure i'd be able to afford the gestation period,very honestly speaking, I would be looking at banks/partially my father to finance this whole proposition.I can't walk up to a bank/my father and say i want X crores(lets assume 3-5here), i want to open up a dealership. that can be done only when i have a proper business plan in place, I was just looking for the feasibility of such a project and the encouragement is amazing to say the least! building networks can be done only once i actually start it up, for now, ill know my car accessories guy, my mechanic, and one or two people here or there, once this actually starts, only then can i become a dealer for accessories,spread the word etc Quote:
Last edited by Mpower : 10th February 2011 at 23:01. Reason: do not bold the entire post | ||
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10th February 2011, 19:16 | #22 |
Senior - BHPian | Re: Feasibility of a *pre owned* Car Dealership I would say you are getting a biased opinion from the forum since majority here are well informed. Why don't you take some market research on why a common man would try a dealership instead of direct buy from a seller. You might find some interesting reasons which you can base your business model upon. Even if it is a small percentage, since the population is big, can make some difference. |
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10th February 2011, 19:26 | #23 |
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership this is exactly the problem I'm facing kutlee, I have zero knowledge as to how to go about these things, and thats exactly why i came to the forum So if at all i had to do a market research to gauge how big the used car market is, and how many cars do exchange hands on a monthly basis, and how much money can be made of each car where do i start? |
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10th February 2011, 19:41 | #24 | |
BHPian Join Date: Oct 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership Raghav, Quote:
If love for cars, pulls you to venturing into business related to car, nothing wrong about it. However, I would suggest a management course after your engineering. If you don't get into the management education immediately, go for a job with some car dealer, do the mechanics, sales etc . In management education, focus on financial calculation and economics. Take projects/papers relevant to Entrepreneurship. Then, at the end of it if you are still in love with car, you would have discovered a niche in Automobile (it could be still pre-owned car dealership). Then, take a plunge. VCs/Banks would love to fund you, if you provide a solid business plan. Last edited by KumaravelS : 10th February 2011 at 19:44. Reason: clarity | |
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10th February 2011, 19:51 | #25 |
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership Thank you sir for your kind advice What you say does make sense, coming from an engineering background, it would definitely help to have a commerce background of sorts. By then ill even know how to make the business plan that i'm struggling with as of now. Will give me a bigger reality check with the marketing and the finance that goes into a venture like this, Because as many people on this forum too advised, try small fish before you burn your fingers, which I'm sure has significance. Nevertheless, It is great to get a perspective of what others think, The fact that it is possible(at least on paper) will help to have a goal to work towards! But this discussion should continue just to see what other hurdles are expected and hence I would request the mods to not close the thread just yet. |
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10th February 2011, 23:11 | #26 |
BHPian Join Date: Aug 2009 Location: Kolkata
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| Re: Feasibility of a *pre owned* Car Dealership @raghav: My 2 cents. One of my relative is working with two renowned car dealership (both owned by same person/s) in the second hand car division. According to him, they are opening a third dealership (of a reputed brand, sorry can't mention the brand) in Kolkata with a total bank finance of around INR 6 crores. Most of the second hand cars they get is via exchange. He was expected to sell around 150 car (avg) per month. Now, the question is: a) If you are willing for a project of around 3-5 crores (as mentioned above), I would advise you to please increase your budget a bit and open a new dealership along with a second hand car operations which I think you have to keep. This way you can benefit from both world. b) Think about your resources and then plan accordingly. If you are not into business and/or have a brand name, I think it is very difficult to convince a bank to fund your project with so much money without any co-lateral security, which itself is very risky considering the volatility of the market and you are completely new. My opinion as suggested by somebody else before is that start small and test the market, that way you can have a feel of the market as well as your bank can have a look at your transactions and who knows they may decide to fund you. No offence please. Anyway, Best of Luck for your upcoming venture. Last edited by Joy : 10th February 2011 at 23:16. Reason: typos |
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10th February 2011, 23:36 | #27 |
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership @joy two renowned car dealership. are you saying they are operating an A.S.S of new cars? with which they have a second hand car outlet as well? I'm a totaly newbie at this, but isn't 150cars a month pretty optimistic? (I'm sure bangalore can match kolkatta in terms of volume though) If we assume, even 10k made of each car, thats 15,00,000 lakhs a month! even if i manage to sell a 100, it means 10lakhs a month,question is, is there that much volume on a monthly basis? and from what i've read online, to put up a full fledged A.S.S of any manufacture, the investment involved is alot more than 6crores, and the gestation period of that is alot more, And yes, i agree, its very difficult to create a new name for myself and thats why i was exploring the franchisee route, but as someone rightly said, it probably makes more sense to do an mba before this Last edited by raghav.carfreak : 10th February 2011 at 23:39. |
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10th February 2011, 23:36 | #28 | |
BHPian Join Date: Jun 2009 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership Quote:
The possibilities where you can reap is from owners who are flying abroad immediately, Very rich or someone who is caught in deep financial crisis. For all of the above, you should have $$$ ready at home and not in bank. If i were you, i would start as a freelancer and read the market.make contacts, learn the loopholes, mistakes, opportunities etc.. | |
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10th February 2011, 23:45 | #29 |
BHPian Join Date: Mar 2010 Location: Bangalore
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| Re: Feasibility of a *pre owned* Car Dealership This is all a learning curve for me blackbeast, And all feedback is being taken constructively. Any particular reason you would say that mahindra in basvangudi isn't doing as well to his expectations? and as far as a forester is concerned, I know that only an enthusiast will buy the car, its just that i'd need the place to showcase the car to sell it. I would reserve my judgement about the innova vs civic because i have no knowledge on the same. I am exploring all the avenues before I try to make a breakthrough. Once again, really appreciate the feedback |
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10th February 2011, 23:48 | #30 |
BHPian | Re: Feasibility of a *pre owned* Car Dealership First of all I wanted to encourage you into this venture and wish you "all the best". Everyone here had many points and here is what I want you to consider. Freebies/Offers/Discounts are now-a-days considered as price hiked. What wins would be the Quality what you offer and the Service you render. Tell your customers how much you bought the car for, and how much you spent and what profit you are looking for and keep the deal transparent. Offer accessories at Genuine prices with installation. Make a small margin in what you do the best and see the volume go high. Maruti is big in advertising and make a lot of crowd pulling with their existing reputation. You will need to work hard to get that kind of reputation (but never loose heart). If you do NOT get greedy you will make a good Used car dealer. You will be blessed with returning customers and lot of prosperity and success. All the very best! Remember, Quality & Service are the only crowd pullers. Last edited by NFS : 10th February 2011 at 23:54. |
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