Mahindra First Choice eyes 50% growth

After successful pilot in LCV sales, company plans to launch the new business

Private equity-backed Mahindra First Choice Wheels (MFCWL), which recently raised $15 million (Rs 94 crore) from US-based Valiant Capital, is eyeing 50 per cent growth in the coming years. The multi-brand used-car company, said it would give more thrust on rural sales and following the successful pilot of light commercial vehicle (LCV) sales, it would step up focus on them

The company expects to close FY15 with a revenue of Rs 50 crore, which is almost double compared to the 2013-14 revenue.

"We hope to grow at the rate of 50 per cent in the coming years," said Nagendra Palle (pictured), chief executive officer and managing director of MFCWL.

The used cars segment is growing at a much faster pace, compared to new cars, and is expected to touch annual sales of 7.2 million units by FY19. In used cars, MFCWL eyes a sales figure of 70,000 units in the current financial year.

The company also plans to sell 70,000 units through e-auction in the current financial year. "Till February, we have auctioned around 63,000 units," said Palle, who was earlier with a US-based automotive e-commerce firm Openlane.

MFCWL, which has converted all its company-owned outlets into franchise model, expects to close the current financial year with 500 outlets. Over the next five years, it plans to take it to 1,800, including small format outlets, which can sell three or four vehicles in a month in small towns and rural areas having population below 100,000.

The company will also add 400-500 dealers to its network to sell LCVs.

Over the past six months, MFCWL has been piloting LCV sales through 40 outlets. It has sold 1,000 vehicles.

"We will invest (the fresh funding from Valiant Capital) in driving franchisee business and the investment would be mainly on manpower, brand and technology," said Palle, adding that it took four months to seal the deal.

Palle said MFCWL was open to further rounds of fund raising, but an initial public offering was still a few years away.