Honda Siel Kicks Off Used Car Exchange Plan

What's more, Honda Siel dealers would also spruce up these cars -- by denting the broken parts and painting the shabby portions -- and sell them at their dealerships.

Honda Siel's 23-odd dealers across the country are currently meeting company officials and understanding the pros and cons of getting into the used car business.

As a pilot project, a dealership in the Capital -- Ring Road Honda -- has already started refurbishing old cars. Others are to follow suit in the coming months.

"At present, the market for second-hand cars is crowded with brokers who are willing to pay sellers anything like an additional Rs 2,000 for a second-hand car over what company dealerships offer at loan melas or under various schemes," says a source.

 

Under such a scenario, car companies have had to delay their plans to enter the used-car business in a big way. Industry sources say that Ford India Ltd and Daewoo dealers have not been very successful in their schemes of exchanging old Ford Escorts and Daewoo Cielos for new ones. Even Maruti Udyog, who had announced its firm plans to enter the used-car business through a joint venture company a year back, has not taken any firm steps in that direction so far.

But Honda Siel has been closely studying the experience of its competitors. "Our process of evaluating used cars would be more transparent. The idea is not to make money from the purchase of used cars, but promote the sales of Honda City," the source added.

"Honda Siel's dealerships have invested anything like Rs 40 lakh on body paint facilities. So their investment would be utilised to the optimum if they get into refurbishing these cars," the source added.

However, Honda Siel dealerships would not undertake any repair work on these used cars manufactured by other car companies. These dealerships would also not service these cars.

Meanwhile, the company would be launching a top-end model of the Honda City -- powered by the V-Tec engine -- sometime in August-end.

The company is also looking at the import of completely built units (CBUs) of Honda Accord after April 1, 2000, when the quantitative restrictions on the import of CBUs would be lifted. The company is likely to launch Honda Accord in June next year.