Company Description: Shriram
Auto Mall India Limited (SAMIL), a subsidiary of Shriram Transport Finance
Company Limited (STFC); serves as a platform for transaction and provides
finance for pre owned trucks and commercial vehicles. It provides asset
acquisition and disposal services, refurbishment of pre-owned vehicles, and
electronic truck bazaars. The company was incorporated in 2010 and is
headquartered in New Delhi. SAMIL is the country’s only organised player
dealing in exhaustive range of articles like pre-owned heavy & commercial
vehicles, construction & mining equipment, agricultural implements and any
very soon passenger vehicles.
Can you please run us through the
genesis of Shriram Automall India Limited and the uniqueness of the company’s
Shriram Group was predominantly
dealing in pre-owned vehicle financing business for the last 35 years. Shriram
Transport Finance Company (STFC), which is the flagship company of the Group,
is into pre-owned vehicles’ financing business. That’s where we realised that a
lot of our customers, who are into buying and selling of commercial vehicles,
had to confront all sorts of middlemen like brokers, intermediaries, etc. In such a scenario, the transactions were not
executed in a transparent manner. So therein we stepped in as an organised
player to serve our customers in a hassle-free and efficient manner. We are
giving them a platform where all the transactions are happening in a seamless
and transparent manner. Initially, we introduced ‘Truck Bazaar’ as a pilot
project and later came out with one-stop kiosks which offer intranet-based
services. Seeing the good response of both the initiatives, we went a step
further by setting up the country’s first automall in Chennai. Now there are 21 such automalls up and
running across the country and another 30 such facilities will be established
in the next four months. Our automalls will be ramped up further to 60
facilities by the end of FY 2013-14.
You are the country’s only organised
player dealing in pre-owned commercial vehicles (CVs) in close to 100 cities.
What specific product range is currently placed on the bidding events and do you have any plans to add more product
lines like pre-owned cars, bikes in this basket?
We started this business with
commercial vehicles and diversified later into tractors, construction
equipments, etc. We have just entered the pre-owned two-wheeler space a couple
of months back. This was done through the online route and we have managed to
clinch 100-odd bidding events per month.
We will now aggressively foray in to the four-wheeler space when it
comes to passenger and utility vehicles. Through our pilot testing, we are able
to organise 1,000 bidding transactions per month. Our primary focus through the
online platform will remain on used two-wheelers this year.
There have been quite a few players
already present in a non-organised way.
So how is your business model better than them? Could you also brief us
about your customer profile as well?
There is no other player in the
organised segment in this country. But that doesn’t mean that there is no competition.
There are umpteen players in the non-organised segment catering to a diverse
set of customers. As I just mentioned, the biggest difference between them and
us is that everything is channelised in a transparent manner in our mode of
operations. So all the complexities associated with the products like legal
implications, RTO paperwork, lien checks, etc, are done away with. So all these processes are established at the
right price points. That again makes us different from our peers. A majority of
our customers are end users who are one-truck, two-truck or even three-truck
owners looking for an additional product in its fleet. There are also a handful
of pre-owned truck owners who are graduating from being a driver to a
single-truck owner and then to a two-truck owner. From the seller’s side, a
sizeable of them is from vehicle financing companies, OEMs of tractors, CVs,
construction equipments & big fleet owners etc.
Will you also be interested in
At this stage, we are not at all
considering it. This is because the size of the pre-owned CV market is so
underpenetrated that we are yet to capitalise on that. The size of brand-new CVs comprising tractors
and construction equipment is worth close to 60,000 crore and another 1 lakh
crore is the worth of the new car segment. The pre-owned segments will be
similar in size and we are gearing up to leverage on that.
You have just mentioned that SAMIL
deals in used CVs. Do you have any plans to offer services allied to these
products like fleet management solutions and bulk parking?
Parking services are already given
to the used vehicles from our end as we have an ample of space all across
India. In fact, we are the only player in the country who can provide this
facility pan-India. We are not interested in fleet management solutions at this
Are you interested in the franchisee
based model? How many units are you transacting per month and what is the sales
target that you have set?
Yes, as we expand into tier-II and
tier-III cities we will be following this route. Presently, we do close to
5,000-6,000 per month in the offline vertical and close to 1,000 units per
month in the online business. As the market is on a downswing, the used CV
segment is poised for a higher growth as people are not buying a brand-new
As the OEMs are coming out with
premium trucks and buses, will you be witnessing a change in the buying
patterns of your customers?
Definitely, there will be some
change in the buying patterns of our buyers. But the demand will arise from all
the segments. If you see the Small Commercial Vehicle (SCV) segment, the growth
has been phenomenal. We are still a small market if you compare our size with
China. So there is immense scope for growth for all the segments from small to
medium to large commercial vehicles. As people are talking about enhanced
engine capacities, bigger loads and improved roads; bigger trucks are also
gaining a lot of traction. In that case, the customer doesn’t mind shelling out
a bit more for additional advantages. So in the future, we will be forming a
dedicated team for all the segments of commercial vehicles.
Are there any challenges and
obstacles right now?
Yes, there are quite a few
challenges. The biggest among them is that of understanding the market. People
have yet not realised the difference that we bring on the table. Another big
challenge is to educate our own team about the USP of our business.
What impact has the recent economic
slowdown had on Shriram as the company deals with various industries and
The economic slowdown has largely
impacted the new vehicles sales. However, we have not seen any deceleration in
our sales as we are not present in that segment. In fact, we are expecting a
robust growth of 40pc in sales during this financial year.
Some years down the line are you
keen on expanding into overseas markets? If yes, have you earmarked any
At present, we don’t foresee entering
any overseas nations with SAMIL. The only reason is that our hands are full
right now. We are busy expanding our
business in the domestic market only. India is potentially one of the largest
automotive markets globally and SAMIL being the lone player gives us an edge.
In the distant future, we may tap overseas markets as the opportunities are
How do you see the industrial
bidding business in India and what’s your vision for the company?
We are very clear in our vision that
we want to be the largest player where all kind of vehicles and equipment
transactions are happening. This includes passenger vehicles too. I feel that as the market evolves, we will be
able to see excellent growth in our volumes. People have found our success stories
very interesting. Even though there will be an influx of more organised
players, we will be having the first-mover advantage. They can imitate us, but won’t be able to
control the client relationship that we have. More than that, we have the
additional advantage of market knowledge. Our relationship with the customer is
also very good.
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