Assignment- Cars24

-By Manish Prabhat

Mail @manish.p18@fms.edu
M.no. 8802281059
Research Methodology

• Store Visit- Two Cars24 owned channel point in Patna, where interacted with
Sales Associate & Service Engineer. Understood the three business verticals- C2B,
C2C & NBFC
• Competition Visit- Mahindra First choice dealer visit & local broker interaction
• Customer Interaction- Understood the purpose of visit to Cars24
Understanding Profile- Customer & Pre-owned Cars

Used Car
Avg age of S.no. Components Metric Value
a pre-
1 Avg Price of a Car 300000
owned car-
5 year 2 Avg Loan disbursement 240000
3 Interest Rate 15%
4 Avg Loan to Value 80%
5 Avg age of Car 5
6 Avg Mileage 50000km
No. of Avg price- 7 Avg no. of previous owners 1
Profile of an avg pre-
owner-1 owned car 3.5 L 8 Age segment of buyers 25-34 years

Majorly for personal use- Affordability

Usage , followed by Value for Money

Customer 1. First Time Buyer

Avg
mileage- Type 2. Multiple Car 3. Replacement
50000km
Buyers` 1. Product Quality
look for? 2. Brand trust 3. Matching Price
Buddies always prioritize cash transactions over a loan, how do we ensure buddies are pitching loans
to these customers which will in turn increase penetration?

• Ensure buddies get control over decision-

Control over
decision making
making about whether a loan will be passed
for a used car, the buyer came for. He
Grasp/Knowledge
should feel confident that loan will be done
Easy & Quick is weak on
financing • Used car loans are tougher to obtain as the
age of the vehicle and its model play a
crucial role in the financing decision for a
Why buddies second-hand car. Currently, it takes 4-5 days
pitch Cash for a loan to get passed on a used car.
Transaction? Making it same day will help buddies close
the enquiry as customers tend to change
buying decision frequently
Loan Process
• Financing involves extra process, on which
1.Approval of loan takes longer-buyer and seller should be in the retail associate doubts himself and
agreement about the affidavit to transfer the car papers in the advises the buyer to prefer cash. Poor
buyer`s name finance knowledge, is required to be
2. Bank checks the regn certificate and insurance docs, which corrected
further gets transferred to buyer`s name
3. 4-5 days process • Creating Win/Win/Win situations: Win for
Loan tenure-5year; Loan tenure is influenced by age and condition credit partner; Win for buyer; Win for the
of vehicle. >5year old car tend to get rejected buddy
What are the on ground problems buddies are facing?

As per my observations, following are few issues/challenges being faced by buddies on a day-to-day basis:
1
Shifting Customer Customers expect a transparent and convenience driven process. Financing used car
Expectations makes it difficult for buddies to make the process smooth & convenient
2
Biased while pitching finance in used car as they tend to close the prospect as soon as
Self-Doubt
possible. Expectation of losing a prospect is due to not enough lined up prospects.
3
Adding value & Insight in Conversation-selling pitch seemed monotonous. Value addition should be done for
customer conversations upsell.

4
Buddies find it difficult to get real appointments with prospects as both buyer and seller,
Gaining Appointments
many a times isn`t available at times
How to increase funnel for consumer loans?

Auto- financing penetration-India Share of pre-owned car finance

Pre-owned car finance interest
rates are usually 4.5%-6.5%
New Car 65%
42% higher
58%
Pre-owned car 15% Average LTV is 75%-80% & Avg
disbursement is 3L
Pre-owned car New Car Metros Non-Metros

There lies a significant opportunity for used car financing. Few ideas are below:
Target FTU- Leveraging the
Personalized loan Target customers of
By increasing offers in partnership
penetrating virgin web/mobile –
your troubled
market; First Mover Content
customer base with banks
advantage Marketing
competitors

By product Market Research- Cross Sell. Ex-

innovation Financial habits Accessories