Cheaper alternatives are readily available

But even that may not work, as cheaper alternatives are readily available. Players like Automart (M&M) are also banking on economies of scale: more the cars transacted per day, lesser the holding cost, resulting in higher profits for sellers. Potential buyers also get a hassle free ambience for making choices. As far as auto manufacturers are concerned, a higher selling price leads to better re-sale values of their respective products. Undoubtedly, like in the developed world, the used carbiz will soon have a major impact on every part of the Indian auto bazaar too. But it all depends on how soon consumers cozy up to the new organized players on the block, because if not, this Cinderella’s carriage may turn into a pumpkin even before the appointed hour...

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist)