Mahindra War Room 2014 Mahindra After Market Caselet

Broadvision Perspectives Client Confidential Page 1 of 3

MAHINDRA AFTER MARKET SECTOR
DEFINING THE HYBRID PLAY

Mahindra After Market Sector comprises 2 companies - Mahindra First Choice Wheels,
where multi-brand, pre-owned cars can be bought and sold, and Mahindra First Choice
Services (MFCS), which offers a wide range of Automotive repair and service solutions
under one roof. This caselet pertains to the e-commerce strategy for the entire sector.

BUSINESS BACKGROUND

The used-car Industry in India is now larger than new cars on a volume basis (1.2X), but
its very distant in how the industry is organized relative to new cars. The used car
industry is also characterized by a lack of formal distribution and service networks. This
lack of a formal structure has led to a state of the industry known mostly for sales and
service transactions that suffer from a significant trust deficit between buyers and
sellers, as a result of which the used car consumer is highly under-served.

The unorganized nature of the used car (sales, services) industry is akin to many other
sectors in the Indian economy that are rapidly organizing. Some example sectors that
are going through an organized revolution are bus transport, real estate, retail,
matrimony etc. Mahindra Groups Aftermarket Sector is specifically addressing the lack
of an organized structure for the used car industry with its portfolio of products and
services provided through Mahindra First Choice Wheels (MFCWL) and Mahindra First
Choice Services (MFCS), focused on multi-brand used car retail and service
respectively.

LIVE CHALLENGE: DEFINING THE HYBRID PLAY

The sales and service sectors of the Indian used car industry are poised for a disruptive
evolution. The physical network of stores and service centres is evolving, though it is yet
to mature, with MFCWL & MFCS being the leading players on the ground. India is also
rapidly evolving digitally, with the growth of Internet, Smart Phones and E-commerce.
While in other developed markets, the Used Car market evolved extensively and then
technology became an enabling layer, in India, Technology is likely to become the
centre-piece around which the whole after-market industry gets created. That is the
fundamental difference. With the successful launch of Indian Blue Book Mahindra
Group has created a prototype of a hybrid model in the After Market Sector. The rapid
growth of internet penetration and smartphones, eCommerce and Big Data provide for
an unprecedented opportunity to build a truly innovative ecosystem that will define a
new standard for the consumers used car purchase & ownership experience. In this
backdrop, determine how the market will evolve over the next 5 years, keeping the e-
commerce and technology enablement trends in mind. Taking a fresh look at both the
organized and un-organized parts of the market, predict how they will evolve, and
thereby re-imagine Mahindras strategy to build a Sales-Services-Spares used-car
ecosystem bridging the wholesale and retail parts of the business, leveraging physical
and online infrastructures. Provide an overall 5-year strategic view for the sector,
through the lens of market opportunity, products & services on the back of a technology

Mahindra War Room 2014 Mahindra After Market Caselet
Broadvision Perspectives Client Confidential Page 2 of 3



and data backbone. Define the size and segments of opportunity of the After-market
sector as a whole, and the relevant, addressable market for the next 5 years, for multi
brand used car sales and service businesses. Through primary and secondary
research, identify key industry needs that will be the critical success factors for the
Aftermarket Sector to scale Examine how internet penetration and technology
enablement are fundamentally changing the way consumers will potentially interact with
the Aftermarket sector. Identify opportunities for Mahindra to leverage this evolving
landscape, and use data both within and outside the enterprise to build a sustainable
advantage. Define how the Group should change its mindset when it comes to tapping
the online opportunity, as a hybrid model. Assess the current product & services
portfolio for the Aftermarket Sector and make 3-5 specific strategic recommendations to
the Sector that should be prioritized in the short term to build a long term competitive
advantage. Define the hybrid plan - between the brick&mortar and the online markets
and their evolutions, and recommend how Mahindra should go-to-market in the context
of metropolitan vs. rural, organized vs. unorganized, and so on, in a continuously
evolving market. Mahindra Aftermarket has 2 companies - MFCWL and MFCS, and has
been aspiring to build synergy between selling a used car and then servicing it. For
example, a new car customer usually services his or her car from the same place in
which it is bought. Can the same consumer behaviour be replicated by Mahindra
Aftermarket in the Used Car space, thereby generating a synergistic 3S model.

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About Mahindra First Choice Wheels

Mahindra First Choice Wheels Ltd. (MFCWL) is the countrys preferred used car mart and is Indias
number one multi-brand certified used car player. The company plans to expand this number to 500
outlets over the next two years. This implies that customers will soon be able to choose from a range of
certified used cars throughout India, including the metros and tier-2 towns and cities. MFCWL closed F-14
with sales of 57,000 used cars, which is 30% growth over the last financial year.

Tremendous attention to detail is required to ensure that each used car meets a high level of quality.
Before purchasing the car, a trained engineer thoroughly inspects the vehicle and also sees to it that all
papers are in order. After purchase, the car is refurbished and undergoes an extensive 118 point quality
check by a trained engineer, as part of the companys robust certification process. The objective behind
the care and diligence exercised is to present the customer with a car in good condition.

In short, buying a used car from Mahindra First Choice offers several advantages, including quality
assurance, safety and a hassle-free driving experience. To give complete peace of mind to the used car
buyer, the company has Warranty products like WARRANTYFIRST, CERTIFIRST and CERTIFIRST+.

Subject to specific terms and conditions, WARRANTYFIRST provides Warranty for all the major
mechanical and electrical components of the car. The concerned components are covered for a period of
12 months or 15,000 km, whichever is earlier. The CERTIFIRST Warranty covers the cars Engine and
Transmission for a period of 6 months or 7,500 Km, whichever is earlier while CERTIFIRST+ covers for a
period of 12 months or 15000 kms, whichever is earlier.

The Warranty products come with the facility of 24X7 Roadside Assistance across the country. The 24x7
Roadside Assistance, subject to specific terms and conditions, assures the certified used car buyer that
should the car breakdown, he will be provided assistance.
Mahindra War Room 2014 Mahindra After Market Caselet
Broadvision Perspectives Client Confidential Page 3 of 3


The Warranty product gives tremendous peace of mind to buyers of certified used cars. Mahindra First
Choice has a website - www.mahindrafirstchoice.com - which provides complete assistance to customers
wishing to buy or sell a car. Mahindra First Choice also has retail finance relationships with major banks
like Mahindra Finance, HDFC, Kotak Mahindra and ICICI Bank for helping consumers buy their dream
cars through loans.

Mahindra First Choice Wheels Ltd. also has a significant presence in the online space. Through its
Autobid auction platform it has sold more than 1.5 lakh vehicles till date.

The company has also launched a new product, the Indian Blue Book (IBB) (www.indianbluebook.com),
which is the most comprehensive unbiased resource for consumers and dealers to determine the value of
their used cars.

A new product for car evaluation called Autoinspekt (www.autoinspekt.com) has been launched.
Autoinspekt is an unbiased third party vehicle evaluation report to determine the condition, quality and
value of a used vehicle. The report itself covers 53 parameters across 8 vehicle systems of the car and is
prepared after physical inspection of the vehicle by a trained engineer.

For more details visit us at www.mahindrafirstchoicewheels.in


About Mahindra First Choice Services

Mahindra First Choice Services (MFCS), a wholly owned subsidiary of Mahindra & Mahindra Ltd., is a
chain of multi brand car workshops across major cities in India like Bengaluru, Chennai, Coimbatore,
Faridabad, Ghaziabad, Greater Noida, Hyderabad, Kochi, Ludhiana, Mumbai, Nagpur, Nashik, Nellore,
Noida, Pune, Surat, Vapi covering an area of over 6,00,000 sq. ft.

Established in 2008, the company aims to offer a world class car servicing experience in India at value for
money prices. With a combination of Company Owned and Franchisee operations, MFCS plans to
become one of the top three car service providers in the country by 2018

For more details visit us at www.mahindrafirstchoiceservices.com.