Multi-brand used car company Mahindra First Choice Wheels may look at venturing into international markets after the recent strategic investment by US-based digital marketing company Cox Automotive.
“We have not had the discussion on the synergies after Cox’s investment yet, they are the strategic partners for the Indian market, but they also happen to be the world’s largest players in the industry and are also very strong technologically, so it is almost axiomatic that there will be some kind of partnerships with them in terms of knowledge sharing and market activities. They are not financial investors and have not come in for quick returns, they have come in for the long run and logically we should also be looking at overseas activity. What form it will take and what geographies we are looking at? I cannot tell you right now,” Rajeev Dubey, president (Group HR Corporate services and After Market) member of group executive board, Mahindra & Mahindra told Autocar Professional in an interview.
Cox Automotive, with $17 billion in annual revenue, owns Auto Trader, the largest digital automotive marketplace in the US, and vehicle research platform Kelley Blue Book.
The investments by Cox, through a secondary sale, saw one of Mahindra First Choice’s early investors, HDFC, selling its entire stake. Phi Advisors, a private equity investor in the company, also sold a part of its stake. While HDFC owned 4% in the company, Phi held around 25-35%, according to some reports.
Apart from venturing into international markets, Mahindra First Choice is also looking to cement its place in India as one of the largest players in the country’s organized used car market by creating an ecosystem based on the ‘Brick and Click’ philosophy.
The company is on an expansion spree and aims to end the financial year 2015-16 with 750 franchise outlets in the country and will also spend on improving its online presence. It is also betting big on its services business and has used data analytics to create a slew of products to cater to the growing used car market in India.
Mahindra First Choice has reported three consecutive years of profits, and ended FY 2014-15 with a profit of Rs 1.92 crore on revenue of Rs 44 crore.