Mahindra First Choice sets up shop in Chennai

Mahindra First Choice Services Ltd, a part of the $6.7 billion Mahindra Group, recently launched its first Car XSpace multi-brand car service outlet in Guindy, Chennai. Spread over 15,000 square feet, the outlet will cater to all car brands across segments. Fast recognising the business potential in metro cities which have large car populations, the company has gone to Chennai. This is Mahindra First Choice’s third outlet in India and its first car service centre in South India.

The first outlet in Mumbai opened in September 2008 and is already servicing an average of nine cars every day at present.

Rajeev Dubey, president - HR, aftermarket and corporate services and member of the Group Management Board, Mahindra & Mahindra, said: “We are delighted to introduce the Car XSpace brand experience to Chennai. In India, the car servicing market mainly comprises authorised repairers and independent garages.

Our market research has shown that car owners would prefer a service outlet such as ours with a value proposition built on trust, customer experience and convenience”.

Untapped market

The vehicle population in India currently stands at six million cars and is estimated to grow to 17 million by 2015. This implies vast, untapped potential in aftermarket services encompassing multi-brand pre-owned vehicles, servicing, spares and the financial instruments and exchange platform which support this value chain.

Elaborating on the facilities in Chennai, R Subramani, CEO, Mahindra First Choice Services, said: “The new outlet at Guindy has eight compact bays. Trained technicians will serve a limited number of vehicles per day, ensuring each customer gets individual attention. Customer centricity is a key aspect of business at Car XSpace with each customer receiving photographic evidence of work undertaken on his car. Since our inception in May 2008, we have serviced 35 different car brands and are being perceived as a one-stop-shop for multi-brand car servicing”.

Car XSpace is aiming at redefining the car servicing experience in the country with a range of unique services available at very competitive rates, as compared to authorised dealerships. The company employs technicians who can cater to multi-brand servicing requirements. Only original spares and accessories, directly procured from companies at competitive rates, are used. Car XSpace also follows stringent quality measures including photographic evidence of parts being changed and a mandatory 50-point check is performed on all cars with an engine analyser. Moreover, car owners are given a warranty that their cars will not have repairs for the next 4,000 kilometres. Vehicles are washed only with car shampoo and soft water as the mineral content in hard water tends to cause scratches on the car body and underbody.

The way ahead

Dubey said that there are plans to invest Rs 550 crore to set up 600 owned and franchisee outlets across India in the next five to seven years for multi-brand services, spare parts and used car sales. “The company has created new verticals including Mahindra First Choice for second-hand car sales, car services, and sale of spares including non-M&M brands. The proposed investment of Rs 550 crore would be for setting up 300 service and another 300 used cars’ retail stores in the next five to six years across 21 cities”.

According to Dubey, the company will open 15 outlets in major cities including Chennai, Bangalore, Hyderabad, Pune, Mumbai and Goa. “We hope to achieve a Rs 6,000-crore turnover in five to seven years’ time.

We are also planning to train school drop-outs and under-privileged students to meet our human resource requirement”. Throwing more light on what Dubey had mentioned, Subramani said, “It is estimated that the company will require over 10,000 people for the upcoming outlets in the next six years. The current value of the car service industry is estimated to be around Rs 12,000 crore and is expected to touch Rs 26,000 crore by 2015. Of this, maintenance would be around 23 percent; minor repair services 44 percent, major repair four percent and accident would be around 27 percent”.

Dubey was of the opinion that the car market in India is fast growing into a lucrative market for aftersales services and used car sales. “In a market where 1.4 million new cars are sold every year, another million used cars change hands. The Rs 30,000-crore pre-owned car market is expected to reach a size of Rs 50,000 crore in the next five years,” Dubey pointed out.

“We will focus on the multi-brand service segment, which is currently less than one percent in the aftersales market compared to 38 percent in Germany, 34 percent each in the UK and France,” Subramani added.