CAPTION: Left to
Right: Rajeev Dubey, President (Group HR, Corporate Services &
After-Market) & Member of the Group Executive Board, Mahindra &
Mahindra Ltd., Dr. Nagendra Palle, CEO & MD, Mahindra First Choice Wheels
Ltd. & Anand Mahindra, Chairman & MD, Mahindra & Mahindra Ltd.
& Chairman, Mahindra First Choice Wheels Ltd.
Mahindra First Choice Wheels
Ltd. (MFCWL), a leading multi-brand used vehicle company, has signed a definitive
agreement to raise $15 million (Rs. 94 crore approx.) from San Francisco based
investment advisor firm, Valiant Capital for a minority stake in the company.
This is the second round of external private equity raised by MFCWL, with the
first one in 2008 from Delhi based Phi Capital, who continues to be an investor
in the company.
According to a press release,
the capital will be used to fund its growth plans over the next few years. The
company will utilise the funds to accelerate its growth both of the physical
network as well as adoption of its technology enabled products and services
used by all stakeholders in the industry – NBFCs, Banks, OEMs, Dealers and
Consumers.
Founded by Anand Mahindra,
MFCWL’s mission is to “organise” every facet of the used car industry and most
important of all provide the used car consumer with a choice of certified
pre-owned vehicles and a purchase experience that mimics the new car buying experience.
“MFCWL is yet another example
of innovation and entrepreneurship within the Group, where new business models
are being explored and implemented with persistence. It is exciting to see marquee investors
attracted to MFCWL and participating in its growth story where much is yet to
come!” said Mahindra who is Chairman & Managing Director, Mahindra &
Mahindra and also the Chairman of Mahindra First Choice Wheels.
MFCWL used car business bridges
the consumer experience online and on the ground. With the physical presence
critical to the used car business, the company has invested aggressively to
provide consumers with a consistent omni channel experience. Commenting on this
strategy, Rajeev Dubey, President (Group HR, Corporate Services and
After-Market) & Member of the Group Executive Board, Mahindra &
Mahindra Ltd. said, “We believe the “brick + click” ecosystem is very powerful
in the used car business and over the years we have seen our consumers and
dealers appreciate this value proposition. We will continue to invest in the
overall growth of the hybrid model in the years to come”.
To enable the hybrid used car
ecosystem, MFCWL has launched several technology enabled products and services
to address the key drivers of trust deficit in a used car transaction namely –
vehicle condition, paperwork, pricing and experience.
“Consumers are looking for
more tools and insight related to used vehicles. We are leveraging our deep
wholesale and retail experience on the ground to launch a slew of technology
enabled products that will materially increase the confidence with which they
can transact on used vehicles – whether buying or selling”, said Dr. Nagendra
Palle, CEO & Managing Director of MFCWL. He added, “We have had a very
successful partnership with Phi Capital over the years and we welcome Valiant
Capital as a new partner to support us in our endeavour to become a world class
used car company.”
MFCWL is planning to end this
fiscal year (2015) with 500 franchise outlets and grow to 1,800+ outlets in the
next 5 years. In addition, it plans to use the funds to broaden its reach for
its products and services across other used vehicle categories. In Fiscal Year
Ending 2015, MFCWL used vehicle volumes sold will be 140,000 between its retail
and wholesale and it will complete 140,000 Autoinspekt inspections,
The used car market, with an
estimated size of 3.2 million units, is already larger than the new car market
and is growing faster than the new car market. The current slowdown
notwithstanding, it is expected that the used car market will become almost double
the size of the new car market in the next 5 years, the release added.