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CARS24 elevates Himanshu Ratnoo as CEO of used cars India

EntrackrEntrackr · 6m ago
CARS24 elevates Himanshu Ratnoo as CEO of used cars India
Medial

Cars24, an e-commerce platform for pre-owned vehicles, has elevated Himanshu Ratnoo to the position of Chief Executive Officer (CEO) of Used Cars India. The announcement was made by Vikram Chopra, founder and CEO of CARS24, in an internal email to the organization. In his new role, Ratnoo will oversee the company’s C2B and retail operations, focusing on scaling growth and driving innovation. Ratnoo’s initiatives include the development of franchise models, lead monetization strategies, and a revamped approach to luxury car transactions. CARS24 offers services like buying, selling, loans, insurance, driver on demand, FASTag, challans, scrapping, and more, making it the only super app in this segment. Apart from this, through CARS24 Financial Services, the company offers various vehicle lending products to customers. Following a modest growth in FY23, Cars24 registered 25% year-on-year growth to Rs 6,917 crore in the fiscal year ending March 2024. However, the firm’s net losses stood at Rs 498.4 crore with an adjusted EBITDA of Rs 318.8 crore in FY24. Cars24 has not raised external funding in the last three years. In December 2021, the company raised $450 million at a valuation of $3.3 billion. Its major investors include Alpha Wave, SoftBank, Tencent, and DST Global.

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The transformative journey of used car startups in India: Report

EntrackrEntrackr · 1y ago
The transformative journey of used car startups in India: Report
Medial

The Indian used car market is witnessing a significant transformation, driven by various factors such as the COVID-19 pandemic’s impact on individual mobility preferences, increased financing options in the used car market, and reduced cash inflow for new car purchases. And perhaps most importantly now, the new and spreading norms on the scrapping of cars. This shift has led to a surge in availability, and demand for used cars, with buyers seeking alternatives to new vehicles. The market is poised for considerable growth, especially with the implementation of new emission standards and focusing on reducing diesel car production. As per a report by Motor Intelligence, the Indian used car market is expected to reach $31.62 billion in 2024 and grow at a CAGR of 15.10% to reach $63.87 billion by 2029. Among the used car companies in India, Cars24 is leading the pack with over Rs 5,500 crore in earnings. Spinny achieved the second position last year with nearly 30X growth in revenue. CarDekho, CarTrade, OLX and Droom are next on the list. The funding and valuation game The used car space has witnessed four unicorns so far including Cars24, Spinny, CarDekho, and Droom. Valuation-wise, Cars24 is on top with $3.3 billion followed by Spinny, CarDekho, and Droom. At the same time, CarTrade’s market capitalization stands at around $370 million. Notably, all of these raised their last funding in 2021. In contrast, OLX has not raised any funding for a long time. Rising scale of leading used car players Cars24’s revenue from operations marginally declined 8.9% to Rs 5,534 crore during the last fiscal year while in grabbing the second spot, Spinny’s scale jumped nearly 30X to Rs 3,261 crore. CarDekho also managed 46% growth with Rs 2,332 crore in revenue. However, the company is also involved in other operations like insurance, marketing et al. Its revenue from the sale of used cars stood at Rs 952 crore during the period. CarTrade’s sales grew 16.3% to Rs 363.7 crore in FY23 as compared to Rs 312.7 crore in FY22. OLX and Droom recorded Rs 514.92 crore and Rs 253.3 crore in revenue during FY23, respectively. For context, Cars24 makes over 90% of its revenue from the sale of cars while a small part comes from financial services. Similarly, Spinny made 95% of its revenue from the sale of cars while the remaining was from services, including commissions on car sales and financial services. Where are the used car companies spending? Cars24 spent over 80% of its expenses on the procurement of goods while Spinny and CarDekho booked 72% and 33.7%, respectively, under the same. CarDekho spent 21.7% of its cost on employee benefits and 21.1% on advertising and promotional expenses. CarTrade incurred the majority (55.9%) of its expenditure on employee benefits followed by promotional and other expenses. The red and green: Bottomline of the used car players Listed on the stock exchange, CarTrade is the only profitable company among the leading players as of FY23. The company posted Rs 40.4 crore profits in FY23 against Rs 121.3 crore in losses the previous year. On the back of rising expenses, Spinny has the highest losses, but not the worst margins. Its losses crossed the Rs 800 crore benchmark in FY23. CarDekho and Cars24 are next in line with Rs 566 crore and Rs 467.7 crore losses, respectively. Meanwhile, CarDekho’s auto business reported Rs 360 crore losses during the period. A look at Covid & Pre-Covid performance The COVID-19 pandemic impact on Cars24, CarTrade, and Droom was big enough to lead to a decline in revenue. On the other hand, CarDekho and Spinny managed to achieve positive growth, although below expectations. Consolidations in used car space The pre-owned car space also saw a bunch of consolidation as bigger brands took over smaller ones over the past five-six years. CarDekho topped the list with seven acquisitions including Revv, Carmudi, Carbiqi, Help on Wheels, ZigWheels, BuyingIQ, and Gaadi.com. Listed company CarsTrade took over Olx Auto, SAMIL, Adroit Inspection, and CarWale whereas Spinny acquired three startups – Scouto, Truebil, and HopCar – since its inception in 2015. OLX as a group acquired around 12 companies which also included global companies such as Sulit and Tokobagus. Recent Developments Delhi NCR-based Cars24 is reportedly piloting a new service that allows car owners to hire drivers on-demand on an hourly basis. The startup had launched a separate app – Autopilot Driver – a few months ago to onboard drivers for the new service. CarDekho shut down its used car retail business amid continuously losing money in the B2C model because of high burn on parking, showrooms, and manpower without any sight of profitability. User behavioural shift in the used cars segment Second-hand cars have been in fashion for eons. However, there has long been a stigma attached to owning a used car. Beyond social status and related concerns, people have had trust issues regarding sellers’ credentials, the history of cars, and so forth. The growing number of startups in this space, however, have democratized the process and have made it more accessible to common users. While increased accessibility and the shedding of stigma are commonly observed, there has been a big change in how people approach used cars. As mentioned above, the pandemic has also had a significant impact, alongside changes in policies and advancements in technology. The trend toward choosing used cars is growing stronger for several practical reasons, a Cars24 spokesperson said. “Buyers are discovering that used cars offer significant value, allowing access to higher-end models and features without the steep price of a new vehicle. The reliability of used cars has greatly improved, thanks to comprehensive inspections and refurbishments, making them a dependable choice. Additionally, the fact that new cars depreciate quickly makes pre-owned vehicles an appealing option for those looking to maximise their investment. This shift in consumer behaviour reflects a smarter, more value-conscious approach to car buying,” the spokesperson explains. The spokesperson further said that car buyers in India are ready to spend 30% (FY22 vs FY23) more on their vehicles, steering towards models with premium features and better overall quality. There is also a surge in demand for SUVs. EVs are too making their way in the used car segment. “In 2023, there was a phenomenal 5X surge in enquiries for EVs on the platform, reflecting a growing interest in alternative fuel options and a shift towards cost-efficient and eco-conscious driving,” the spokesperson said, adding that Cars24 is currently averaging 200 enquiries daily for EVs. CarDekho is also bullish on the used car segment. “Used cars will still continue to do fine as the older vehicles will migrate out of metros,” said Amit Jain, co-founder and CEO of CarDekho Group. Jain also highlighted that demand for used cars is mostly from individual users as cab drivers need a yellow plate which is expensive, making the proposition unviable for cab drivers. “Cab drivers also need CNG installations as most of the used cars are either petrol or diesel which add extra burden on them,” he added. TheKredible’s take Even as it is a huge and growing market, it is well known that making money in the market is a different ball game. Buyers have the option of direct deals with owners, free listing sites and of course, a massive unorganised market, before they approach the organised players. With the option of going with the firms floated by automakers such as Maruti Suzuki True Value and First Choice are always there in case of a purchase. Thus, beyond the obvious issue of price for both sellers and buyers, these firms have to invest in differentiators that will be valued. The high losses and lack of loyalty indicate just how little success they have had in this effort. We believe lasting success in the category will continue to demand a long-term, high-investment approach that not all the existing players will survive.

CARS24 acquires Team-BHP

EntrackrEntrackr · 2m ago
CARS24 acquires Team-BHP
Medial

CARS24 acquires Team-BHP CARS24 has acquired Team-BHP, a major automotive community platform in India. The move aims to improve digital infrastructure and enhance automotive decision-making for users. Team-BHP will continue to operate under its founding team with its current policies, including no advertising and community-based moderation, the company said in a press release. Founded in 2004, Team-BHP provides user-driven reviews, ownership reports, and vehicle insights. CARS24 will focus on integrating technology, product upgrades, and AI tools into Team-BHP without altering its core operations. Vikram Chopra, CEO of CARS24, stated that the partnership will support better data use and expand platform capabilities. Rush Parekh, founder of Team-BHP, emphasized the platform's continued independence while leveraging new resources for growth. The companies will work together to enhance features for users involved in vehicle buying, selling, and ownership. CARS24, which is backed by Alpha Wave, SoftBank, Tencent, and DST Global, claims to have sold 200,000 cars in the fiscal year ending in March 2024. During the period, its gross revenue grew to Rs 6,917 crore from Rs 5,530 crore in the previous fiscal year.

Cars24 sells 2 lakh cars in FY24, revenue nears Rs 7,000 Cr

EntrackrEntrackr · 7m ago
Cars24 sells 2 lakh cars in FY24, revenue nears Rs 7,000 Cr
Medial

Following a modest growth in FY23, Cars24, an e-commerce platform for pre-owned vehicles registered 25% year-on-year growth in the fiscal year ended March 2024. However, the firm’s net losses stood at Rs 498.4 crore with an adjusted EBITDA of Rs 318.8 crore in FY24. Cars24 India’s gross revenue grew to Rs 6,917 crore in FY24 from Rs 5,530 crore in FY23, according to the company’s press release. In an interaction with Entrackr, Cars24's Chief Financial Officer Ruchit Agarwal said that the sale of cars through the auction business and retail contributed approximately 92% of the total revenue. This income grew by 24% to Rs 6,400 crore in FY24 from Rs 5,164 crore in FY23. Agarwal added that the income from the financial services stood at around Rs 300 crore while the rest of the revenue came from service fees, parking fees and the sale of other value-added services including insurance assistance and warranties. In FY24, the company claims to have sold 200,000 cars. Cars24’s holding firm is based in Singapore and oversees 12 subsidiaries across India, Australia, the UAE, and Thailand. The company’s consolidated financial results are yet to be released and may differ from the figures reported by the Indian entity through the release. For the pre-owned vehicle seller, the procurement of cars was the largest cost center, accounting for 81.8% of the overall cost. In the line of scale, this cost grew by 23.8% to Rs 6,106 crore in FY24. Its employee benefits, technology, advertising, legal, commission to brokers, and other overheads pushed the overall expenditure of the firm to Rs 7,461 crore in the last fiscal year from Rs 6,053 crore in FY23. The significant growth in scale and controlled expenditure enabled Cars24 to retain its net losses steady at Rs 498 crore in FY24. However, the adjusted EBITDA (losses excluding all non-cash items) stood at Rs 318.8 crore in FY24. Notably, the company claims to have improved its gross margin by 35% in the last fiscal. Cars24 has not raised external funding in the last three years. In December 2021, the company raised $450 million at a valuation of $3.3 billion. Its major investors include Alpha Wave, SoftBank, Tencent, and DST Global. In August, Cars24’s co-founder, Gajendra Jangid, said that the company is preparing for an initial public offering, though he did not disclose a specific timeline.

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