Traditional used car dealer TS Mahalingam & Sons is holding its ground against digital disruptors

K Mahalingam (left), Partner, TS Mahalingam & Sons and K Ravishankar, Partner, TS Mahalingam & Sons, at their used car showroom in Chennai. | Photo credit: BIJOY GHOSH

“In the last few years, offline used car dealers have lost almost 25 percent of the market to online companies. Our monthly volumes have fallen from around 250 vehicles to around 200. However, we are not in the volume game today; we are focused on buying more vehicles with lower mileage, minimal damage and good engines,” said Ravishankar. “The online players have certainly made a big impact in recent times. They also have an offline model as customers want to see cars physically,” he adds.

“The used car market is growing at 15 to 20 percent. We can also grow from 200 to 300, but we would like to be around 250 cars per month. Earlier we were aiming for turnover, but today the focus is on profits. This sector is one of the most complex and challenging with so many variables. We operate on a razor-thin margin of 4 to 5 percent,” he added.

TSM handles close to 3,000 cars per year with a turnover of around ₹100 crore, distributes over ₹200 crores in car loans and has over 2 lakh customers.

Ravishankar said the demand for automatic vehicles in the price range of ₹5-8 lakhs has increased in the last few years. At TSM today, 10-15 percent of the vehicles are automatic.

Interestingly, electric vehicles (EVs) that entered the market three to four years ago are now selling for a second time, but battery replacement issues are a challenge. “The retail value of EVs is low compared to other categories. An EV that cost around ₹1.20 crore last year is now being offered at half the price. Even then, there are no takers,” he said.

K Mahalingam, Partner, TSM, said the recent reduction in GST has led to a decline in new car prices. This in turn has further reduced the price of used cars. “We have an inventory of 15 to 20 vehicles that were purchased before the GST rate cut. We are unable to sell as the price at which we purchased and the price of a new car of the same model has fallen sharply,” he said. “After the GST rate reduction, we have also reduced our prices,” he added.

Published on November 25, 2025