The Hindu : Tamil Nadu / Chennai News : Hero Honda enters used two-wheeler market

Online edition of India's National Newspaper
Thursday, Jul 20, 2006

Tamil Nadu

Tamil Nadu - Chennai

Hero Honda enters used two-wheeler market

Sandhya Soman

Company opens first certified showroom in K.K. Nagar The pre-owned vehicles come with a 1 year or 10,000 km warranty. Two free services and a bonus service are also being offered

CHENNAI: Hero Honda Motors is gearing up to tap the growing used two-wheeler market, with the opening of its first such certified showroom in the city.

The Sure! outlet on Jawaharlal Nehru Road in K.K. Nagar, according to company officials, is to bring in the 1,000 customers who buy or sell Hero Honda vehicles every month.

This is out of the 6,000 vehicles the company sells every month, said DGM Rajesh Mukhija, after the inauguration of the outlet on Thursday. "We will buy back our vehicles in an organised manner, refurbish them to meet the company's quality standards and sell them through our dealer Vishnu Automobiles," said Mr. Mukhija.

After fixing the resale value based on the "age and vehicle condition," as assessed by in-house engineers, the buyers would also be offered financial packages from ICICI, Centurion Bank or HDFC, said Deputy Zonal Head (South) A. Srinivasu.

"The pre-owned vehicles come with a 1 year or 10,000 km warranty. We will also offer two free services and a bonus service," said Area Manager B. Srinivas.

For now, the company will restrict itself to buying back only Hero Honda vehicles that are not more than five years old. Future plans, however, include getting a foothold in the growing pre-owned two-wheeler market.

According to Mr. Srinivasu, 60 per cent of sales now happen in the firsthand buyer segment. "Only the rest is in the upgrading/selling section."

The trend is expected to reverse, with the ownership cycle of two-wheelers coming down to three years.

"We have close to 5 lakh Hero Honda customers in the city. Within a year, we expect to double the number of transactions in pre-owned vehicles," he added.

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