At a time when car sales have started moving southward for the first time in nearly three years, country's largest carmaker Maruti Suzuki is turning to 15-20-year-old cars to push new ones through exchange.
The company has tied up with scrap dealers across India to dispose of old cars exchanged for new cars and is welcoming customers to come with old cars of any make for exchange.
"We have tied up with 15-20 people dealing in scraps in each of the cities that we are present," Maruti Suzuki India Chief General Manager (Sales Support) Ravi Bhatia told PTI.
The company has started giving offers to customers worth up to Rs 40,000 while purchasing a new car through exchange, while inviting bids from scrap dealers at the same time for the old cars.
He said the move has helped the company in pushing sales significantly through its pre-owned car business 'TrueValue'.
"Ever since we have started accepting 15-20 year old cars, exchange has gone up from 12 per cent to 20 per cent and it has helped an entry level product like Alto to become a replacement model," Bhatia said.
Earlier Alto has been considered to be the car for the first time buyer. The exchange offer has helped about 12 per cent of total sale of new Altos coming from it.
Initially, TrueValue accepted only Maruti cars, which were not older than 10 years and ran less than one lakh kms. Recently, it has extended the scheme to all cars of any manufacturer and of any age.
"When we did a market study, we saw a latent potential where people wanted to exchange their old cars but did not know where to go and was not getting good value from scrap dealers as well," Bhatia said.
With organised players like MSI coming into the scene, people are coming forward, he added.
Through the extension of the scheme to any used car, the exchange sale of new Alto has been doubled to 2,800 units now from 1,400 units in June.
Through its 290 TrueValue outlets across the country, the company bought over a lakh used cars and about 86,000 exchanged with a new Maruti Suzuki vehicle. In the first four months of the current fiscal, the company has sold over 33,000 new cars through exchange scheme.
The country's overall size of the used car market is estimated as the same as that of new cars.
