Interview

Director & CEO- Shriram Automall India Ltd.

SAMEER MALHOTRA

Q.1 Please tell us about SAMIL’s journey till now

To simply put it, the journey has been fantastic. When we started off a decade ago we did not visualise the number of things we are doing today. To start with our focus was very clear and specific. We were dealing with just one segment and the thought process was that we would be handling the assets from customer base of the Shriram Transport Finance Company. But then as we progressed we realised the spectrum of operation was much wider than we had ever anticipated. The entire Eco system of Shriram Group was turning out to be a potential opportunity. So currently besides just the transporters we are also dealing with Banks/NBFCs, OEMs, Insurance Companies, Dealers and many others. We never reached a stage where we had to wonder what to do next. We created the path in some cases and often the path would be laid for us. We have been registering impressive growth every year. While we have been consistent with 30-40% growth every year, there have been periods where we have recorded over 50% growth. So naturally, I am compelled to say that the journey has been fantastic.

 

Q.2 What are the different services catered by SAMIL? Please Explain.

Shriram Automall India Limited (SAMIL) as a company was brought in the Indian used vehicle and equipment market to help customers all across the country acquire and dispose pre-owned vehicles and equipment at optimal prices in an ethical and organised manner. SAMIL, because of its unique services has become India's largest platform for pre-owned vehicles and equipment. 

Now, talking about the services offered, one of the main services provided by SAMIL is its unique physical bidding platform - a one-of-its-kind facility where ramping of vehicles is done at their disposal. Vehicles and Equipment are ramped during the bidding event where the event manager (auctioneer) and bid catchers make the event very unique and interesting. We have a much wider reach for this unique platform and currently we do around 400 physical auctions per month. The other service that we cater is Online Bidding through our well maintained online portals, bids.samil.in and cartradeexchange.com. We conduct nearly 1500 online auctions every month which is very encouraging considering the nature of this sector.

We take pride in driving a customer base of more than 17 lakh through SAMIL, the only company to offer 24*7 secured parking facility. Our presence at every nook and corner of the country with our 150+ bidding locations including over 100 well structured Automall. We cater to all segments of the industry that includes Commercial Vehicles, Construction Equipment, Farming Equipment, Passenger Vehicles, Two Wheelers, and Three Wheelers, also providing our professional services to Banks, NBFC's, Dealers, Fleet owners, Individuals, Original equipment manufacturers, Contractors etc.

 

Q.3 India is facing an economic slowdown, how market is affected by this?

Everyone has been under stress and things are no different for us too, though the extent of stress would be much less as compared to others. One of the major problems that we face is that our buyers are unable to get adequate credit to buy vehicles. The silver lining is that there is no dip in the demand for used vehicles and equipment. We still have good numbers, though the problem is that there is a crunch of funding that is hampering the numbers. Our belief is that even if the market scenario is bad and hit by recession, the purchase of used vehicles doesn’t get affected. In fact many people prefer buying used vehicles. They feel that is more viable and saves CAPEX for them. This brought down the number of equipment required for the same job. But even though the sale of new construction equipment has been hit, sale in the used equipment segment continues to be robust and once again the primary reason is that this option is much more viable for many. This year due to current economic scenario there is much expected de-growth.

 

Q.4 What is the condition of India’s used equipment industry?

Indian Automobile Industry is witnessing a slowdown, whereas, those of used equipment are seeing a momentum. The used equipment industry in the country is expected to witness an increased demand in the coming years, owing to factors, such as growth or advent in the online sector and growth of the organized sector. Talking about the Construction Equipment Segment, the Indian government has recently invested in the infrastructure sector which is supposed to increase the demand for different kinds of Construction Equipment. The demand for Construction equipment is increasing in India due to the growth of the real estate market.

 

Q.5 What are the challenges for used heavy equipments industry?

Increasing environmental concerns along with stringent regulations delay approvals for over all Infra structure projects in India which in turn increases the overall budget of projects while slowing down the processes. The revenue of the construction equipment market is limited as heavy equipment is rented and lie unused for months.

Also, the secondary market for used construction equipment is yet to develop, preventing the resale of equipment and in return the overall revenue of secondary construction equipment market is reduced.

 

Q.6 What are the main expectations of the clients and how SAMIL resolve their queries?

According to me, the first and foremost thing any client would expect is Transparency of the transactions. We at Shriram Automall make sure to cope up with their expectations by maintaining complete transparency of the process as well as the transactions with them. As we believe, trust is the key to any successful relation; we provide all the necessary details and documents with them. We have our expert valuation team which brings out the fair price value of the vehicles and equipment as per the current market norms, which answers their other point of fair price valuation.

 

Q.7 What are the future growth plans of SAMIL? How the market will change in coming years?

Well, the journey has been exciting and we have probably surprised ourselves by diversifying the way we have. We have been putting our hands into anything that comes our way, which is more like a Pandora ’s Box. We dig in our hands not knowing what to expect and what to do. But we have managed to handle it well. Earlier we thought we had done enough, but when we dug in deeper, we realised that we haven’t even started the journey. Last year, we recorded sales of over Rs 3,200 crore and in terms of numbers we did over 16,000 units every month. This gives us the distinction of being one of the largest used vehicle and equipment platform  in the country today. However our transition from trucks to other vehicles was very interesting. Our journey has been shaped by the demands of our customers. When we were helping banks in selling their commercial vehicles, they said can you also help us in selling a Construction equipment or farm equipment or two wheelers,This way we diversified into every segment – everything that moves on wheels. Needless to say, every segment requires an expertise and we developed the same within our organisation depending upon the requirement of the customer – be it the single loader owner or the transporter or the bank. 

Having achieved this much, our focus is now on expanding our network. India is not just 100 cities and we want to make our presence felt in all geographies. We are working on the journey from 100 to 500 locations and while we took 10 years to get to 100, we do not want to get to 500 at that pace. We have come up with different ideas to make the journey to 500 much faster – probably half the time it took us to get to 100 locations. The other focus would be on improving our market share. We all know that buying and selling of used vehicles and equipment is still dominant in the unorganised segment. We want to change that trend and improve our market share, not just in the unorganised segment, but in the organised segment as well. We are looking at expanding our buyer base and we have a dedicated team working on the same