Volkswagen enters used-car biz

German luxury car-maker Volkswagen on Tuesday forayed into the multi-brand pre-owned car business under Das WeltAuto brand and expects it to contribute 25 per cent to the company's total sales.

At present, Mahindra First Choice is the leader in the Rs 60,000-crore (Rs 600-billion) multi-brand used car market.

Volkswagen expects 25 per cent of its sales to come through this new business, company's managing director for passenger cars Arvind Saxena said after inaugurating the dealership in the city.

Das WeltAuto is the global pre-owned car business of the Volkswagen group.

Volkswagen has set up 15 dealerships and would add six more by December, he said, adding, "This would help us gain deeper access."

"In all, we will have 50

outlets by the end of next year," Saxena said.

The pre-owned car business, which was pioneered by country's largest car maker Maruti Suzuki way back in 2000 under the brand True Value, today stands at 1.3 times higher than the new car business.

Industry estimates suggest that of the total pre-owned car business, about 12-14 per cent comes from the original equipment manufacturers, which is expected to go up to 18 per cent over the next five years.

"The growth rate is much higher than the new car sales.

"It is an important activity and no OEM can miss it out. And for this simple reason, we have also ventured into this segment," Saxena said.

"We have stringent systems and processes that ensure every pre-owned car undergoes a 160-point checklist besides offering a warranty, which so far no other has offered," he added.