Maruti Suzuki revamps used car division True Value, to add 300 outlets by 2020

Maruti Suzuki, the country’s largest car maker, on Thursday announced a complete revamp of True Value, its pre-owned car division.

The overhaul of the used car chain is being done to strengthen its brand value as well as to have a pie of the 3.6-million units a year used car market, a majority of which remains unorganised.

The Delhi-based company, along with its dealers, will set up 150 brand new True Value outlets by March next year and take its tally to 300 in the next 2-3 years.

These outlets will be digitally integrated through a portal so that customers can access details of all cars available at True Value outlets nationwide.

A 376-point check will be carried out on all cars sold through True Value with a certificate issued by a certified engineer indicating the health of the car through a star rating process.

At present, only 22 percent of cars sold by True Value are certified which the company hopes to increase to 30 percent this year. Only Maruti Suzuki cars (including those sold through Nexa) will be sold through this.

“This revamp is done to make sure the buyer remains within the Maruti fold. From a two-wheeler he can upgrade to a True Value certified car before moving to either Maruti or Nexa,” said a senior executive of Maruti Suzuki.

True Value was started in 2001 which became the first attempt by a company in the organised used car market. The company rapidly expanded its network and as of last year clocked sales of 350,000 used cars.

This existing True Value network will be either phased out or get upgraded in due course. These outlets will also continue to sell uncertified cars which will be of a brand other than Maruti Suzuki.

Kenichi Ayukawa, Managing Director and CEO, Maruti Suzuki said, “We want to offer buyers of pre-owned cars the same experience as buyers of new cars. A network of spacious new outlets, using digital technology for customer convenience, will be the highlight of True Value. Our focus will be on quality cars, refurbished and certified with the assurance of warranty.”

At present, there are broadly five different ways to sell used cars — through dealers, brokers, online, pre-owned outlets or through friends, family, and acquaintances.

The unorganised market makes up 85 percent of the total used car market which as per estimates is growing by 10-15 percent every year and is between 1.2 times and 1.5 times of the new car market.

The unorganised market is not impacted by GST whereas sales through the organised channel attract a GST rate of 28 percent on the cost of refurbishment done on the vehicle.