CARS24 has unleashed a major disruption in the used car market with its unique C2B model and is well poised for accelerated growth in the space in the coming years.
Selling a used car has several hassles for both buyers and sellers. It takes considerable time and effort to deal with strangers, get test drives arranged and get into tough negotiations on the price. Add to that the problems faced in transferring RCs and getting payments. Moreover, both the buyer and seller face a high degree of unpredictability on the value that they have obtained.
With CARS24, Founders Vikram Chopra and Mehul Agarwal have removed most of these barriers that used car sellers face with a unique, asset-heavy C2B model. They can get a price estimate of the car and if satisfied, they can visit the nearest showroom and sell the car in less than 2 hours. CARS24 will send the money to their account and also take responsibility for all the paperwork as well as RC transfer.
CARS24 then sells the cars it buys to partner dealers across the country via an online auction model. The company also helps dealers with financing and better organization of the supply chain.
In July 2014, CARS24 raised US$ 50 million in a venture funding round led by Sequoia Capital and doubled its headcount to 2,000. Within three years of inception, CARS24 has unleashed a major disruption in the used car market across the country. It has purchased more than 100,000 cars across India and plans 110 branches in 20 cities by the end of 2018. Furthermore by 2020, it plans to have a network of 1000 branches in 100 cities and facilitate more than 1 million transactions.
For the customer, there are few joys in the world that can match the exhilaration of buying a new car. But from a businessman’s perspective, used cars are where the money is. This is driven by shorter ownership times, price/value perspective, increasing penetration in small towns, growing demand for used luxury cars and greater acceptability towards used cars.
Per capita consumption of cars in India is at 50 per 1,000 people compared to around 500 per thousand people in developed economies, signifying huge potential to grow. SIAM estimated that the used car market was 1.25 times larger than the new car market in 2018 with sales at 4 million. CRISIL states that two out of every three cars in India are used cars and the used car market could grow at a CAGR of 15% till 2020.