EXCLUSIVE: Cars24 is racing towards profitability as Indians choose used cars over new ones
- In an exclusive interview with Business Insider,
Cars24CEO Vikram Chopra said the startup will breakeven by December 2019.
- Having sold over 1.6 lakh cars since 2015, they plan to be in 70 cities by the end of the year.
- Cars24 has been heavily advertising during the ICC Cricket World Cup and during the India vs Pakistan match, traffic to their website went up by 85%.
In an exclusive interview with Business Insider, Cars24 co-founder and CEO Vikram Chopra said that the company was on track to break even soon.
“We operationally make money on every car and our funding needs are not very high,” said Chopra.
Cars24 sells over 13,000 cars every month through its platform and over 4 years has sold 1.6 lakh cars. Currently present in 35 cities and 150 branches, Cars24 plans to be in 70 cities and 230 branches by 2019.
“We only have 2% market share right now of the $30 billion used car market. In India, 5 million used cars are sold every year. Our objective is to take this number of 2% to 20% over the next 5 years,” said Chopra.
Interestingly, they have been cashing in on television ads during the ICC Cricket World Cup. In fact, during the India vs Pakistan match the traffic to their website was up by 85%.
At the same time, new car dealers witnessed a sharp fall in enquiries.
The Indian auto industry has seen a massive slowdown in the selling of new cars. Passenger vehicle sales in India have been on a downtrend for seven months and June 2019 won’t be any different. Consumer sentiment has suffered due to cost increase amid strict safety regulations, delay in monsoon, rural stress, slowing economy and liquidity constraints.
However, that hasn't interrupted the sale of used cars. While new car sales have been shrunk eight months in a row, Chopra said that Cars24 sales have grown at the rate of 5% month-on-month.
Building a seller first model
Chopra and his co-founder Mehul Agrawal were the founders of Fabfurnish – an online marketplace for furniture, which also saw interest from Future Group chairman Kishor Biyani but the deal failed to materialise.
However, with that venture, they realised one thing – their next business had to focus on the sellers.
“We have so many businesses in India that is solving problems for the consumer. Everyone always thinks demand first, we rarely think about the supply side of the problem. India actually has interesting supply side problems where a seller doesn’t know where to go to sell his/her car,” said Chopra.
From their very first location in 2015 next to a petrol pump in Gurugram where they saw sellers come all the way from Noida, today Cars24 is spreading its business across cities and states in India. And now is ready to see some profit.
Car makers in India may have more bad news to share on Monday