Popular C2C marketplace OLX has a launched a new franchisee-led pre-owned car retail offering. This allows both consumers and dealers to buy and sell used cars, and the model is know as OLX Autos. It will allow dealers as well now to be a part of OLX India’s dealer network. This would be an extension of the company’s online classifieds.
Used car dealers, who will be OLX exclusive partners, will be able to leverage the OLX Integrated omnichannel experience. They will also be able to sell the used cars available on OLX’s online marketplace. Dealers will now be able to get benefits such as providing value-added services to consumers and the access to a digital storefront.
In the initial phase of this new program, customers will be able to see the franchise stores in the following cities:
Where will the stores be present?
- Delhi
- Mumbai
- Madurai
- Chennai
- Patna
- Jammu
- Rudrapur
- Kolhapur
- Kolkata
How will the new store help consumers?
The store will help customers access a much larger inventory of pre-owned cars than earlier. Along with the vehicles themselves, they will now be able to get benefits such as roadside assistance, warranty services, and insurance protection on their purchases. These programs were never as widespread for used cars as they will be through this program.
Current status of India’s used car market
According to estimates by OLX, 80% of the pre-owned car market in India is unorganized at present. A large percentage of the players in this group include small and medium-sized dealers who have limited car inventories and operate in limited geographical pockets. As a result, their access to consumers is very less, which further limits their earning potential. Clearly the new franchise model is a step in the right direction. It is a bold attempt at organizing this sector. Right now, the problem of unsold inventory as a result of COVID-19 has made it very difficult for them to get working capital.
Problems in the second hand car market have been further compounded by the emission norms. With great difficulty, dealers got one extension in the sale of BSIV inventory, but not anymore.
Presence of a certification process
Organizing the used car market helps in customers being confident of the quality of the car being sold to them. Now a certification process has come into place for the above purpose. You will find experienced technicians using hi-tech instruments such as paint meters to look closely at cars.
Another reason for OLX to launch the new franchisee model would also be to take on a company such as Cars24, which has escalated to the top of the used car retail business in a very short period of time. They prove to be hassle free to most customers as they do not need physical buyers to be buying at the same time when you go to sell. They carry out an auction during which their channel partners bid for the cars in question.