Volkswagen Finance India, a wholly-owned subsidiary of the German auto maker and a part of Volkswagen Financial Services AG, has received a licence from the Reserve Bank of India to start a non-banking finance company to finance the purchasers of Volkswagen pre-owned cars.
According to market expectations, Volkswagen is going to step into this business by May 2011. Volkswagon has two other brands under its belt – Audi and Skoda.
“We have been in the Indian market for quite sometime. We think there are people who want to change their car after two-three years. There is a demand for pre-owned cars here and we think this is the right time to enter the segment,” said Neeraj Garg, Director, Volkswagen Passenger Cars, Group Sales India.
Exper opinion is that there is plenty of room for business in the used car segment in India and that is why so many foreign companies are making considerable efforts to cash in on this enormously potential market. Brands like Mahindra and Mahindra, Maruti, Honda Auto, Ford, Toyota etc have long been in this unorganized business which has great potential to become a regular market.
“This is a very personalised business. The organised sector is hardly four to five per cent of the total used car market. But if you consider people like us who are in a way organised, offer warranty and other facilities, it can be said that almost 20 per cent of this market is organised,” said Arif Fazulbhoy, Director, Fazulbhoy Motors, one of the largest used car dealers in Mumbai.
