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Maruti forms JV with Sumitomo, Countrywide Finance for used cars biz

Maruti Udyog Limited today forayed into the used car business with the establishment of its first service centre under a tripartite joint venture with Sumitomo Corporation of Japan and Countrywide Finance.

Inaugurating the service centre at Okhla, MUL managing director RSSLN Bhaskarudu said the centre has been set up with a total investment of Rs 115 million.

''We are looking at setting up similar service stations across the country but a final decision on the same and the number of such centres would be decided viewing the success of this venture,'' he added.

This venture would also be used for testing waters in the business of trading used cars. ''Used cars would be traded through this venture, which is totally independent of MUL. The venture would buy and sell used cars on its own,'' Bhaskarudu said.

MUL and Sumitomo both control 47.5 per cent stake each in the venture while Maruti Countrywide Auto Financial Services Limited holds the remaining five per cent. It will operate under the trade name of Maruti Service Masters.

Bhaskarudu further stated that this centre would not prove to be a competition for the existing Maruti Authorised Service Stations as only 40 per cent Maruti customers get their vehicles serviced from MASS at present. ''This leaves us with a huge chunk of 60 per cent customers. The joint venture would try to bring this 60 per cent lot into the authorised service fold.''

The company would engage in the business of service and repair of Maruti automobiles, sale of spare parts and accessories of motor vehicles besides facilitating sale and purchase of used cars. In addition, the joint venture will identify and offer other value added services to the Maruti customers.

The integrated workshop is equipped with all the latest tools and equipment for diagnosis and testing of the vehicle parameters, including a tester line specially imported from Germany for exhaustive check up of brakes, suspension and steering geometry within the workshop.

In future, the company intends to diversify, both geographically with additional workshops as well as in terms of range of services on offer.

UNI

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