In conversation with Mr. Jatin Ahuja

As told to Chinmay Chaudhary

Chinmay: How do you see Government finally reducing GST for the second-hand cars, like they have now revised to 18 percent?

Mr. Jatin Ahuja: It was a big struggle at 48 percent, as it was a lot of tax for a car that is already expensive. So now at least people will be able to survive.  So it’s a good move as they have understood our concern and solved it. I am glad and happy that the Government listens to businessmen.

How did the 48 percent GST affect your sales?

It affected in a big way. 48 percent is non-sustainable, you can’t sell cars at 48 percent GST, and it is not viable. The viability that went for a toss over the last six months, at least the business can sustain and continue now. If 48 percent GST would have been continued, then 50 percent of the car dealers would have shut.

How do you pass on the GST benefit to the customers?

In an unsustainable GST, we were the ones consuming it and we did not pass it on to the customers, so now at least we have a breather. It was hampering my profitability in a big way, almost 50 percent of the profitability used to go for a toss.

What finally lead the Government to lower the taxes?

We had various meetings with the GST council along with the finance minister and the revenue home secretary. On various occasions, we have been there with SIAM, Maruti Suzuki, Tata Motors, Mahindra and Mahindra. We all approached and gave various representations. They understood our concern at the first meeting.

So the extra 30 percent was paid by you?

Yes, I did not pass it on to the customers. The market is already slow and sentiments are not very positive so I did not want to hamper the sales. If I increase prices sales would have gone down to a huge extent. And that’s the reason our sales have not gone down, but our profitability has gone down. Our profitability has also now sustained because of reduction in GST.

With the sales of luxury cars going up, how do you see the future scope of these brands in terms of resale value in India?

The future is pretty bright; there is no doubt about it. Now it is about moving towards newer technology which is electric and less of diesel, so it will be evolving. Let’s see who adopts the technology quicker with the balance players, will be a success.

Wondering what BBT is all about?  We asked Mr. Jatin a few question about the facility as well.

 What was the whole idea behind Big Boy Toyz? How was it born?  What were your thoughts when you started? Where do you get your cars from?

The idea behind BBT was passion and passion converted into the profession. As a kid I was always passionate about cars so I really wanted to do something in cars and eventually, we upgraded, worked hard and came to the level of BBT cars. Before starting BBT I was in business for about seven years. So it was not planned and everything was updated gradually. Our buyers are our sellers, so it is about dealing with the same people. Yes, we do that but the numbers are not that much.  We do about 100 cars a year. We are more prominent in used cars. We do a consolidated turnover of Rs 250 crore a year.

Can you tell us more about your warranty offers and buyback schemes?

The engine and transmission are covered under warranty, and the buyback is 25 percent of selling price. So we buy the car back at minus 25 percent. The buyback is one year and warranty is six months. If somebody comes after, say a time of two years, we definitely buy at the right price because we get 100 percent repeat business from our clients and we have to do justified business.

Are you dealing with hybrid and electric vehicles as well or only with petrol and diesel?

There are very few electric and hybrid vehicles in India. I have a couple of hybrids in my stock, the Lexus 600 Hybrid, but the volumes are too little. We are not importing cars. We used to import cars, but not anymore.

You mention that your cars are not ‘pre-owned but pre-loved’. Can you tell us about the customer’s approach towards maintaining their cars and what kind of cars you get around?

Yes, it is the terminology we use not to call them as pre-owned but pre-loved. It is more towards passion than towards business. Seventy-five percent of our customers are passion driven customers.  Most of our customers are passion driven customers. They are very passionate about their cars and they take care of their cars very well, as it is a part of their lives, so that is why we call it pre-loved.

Can you tell us about the 151 checkpoint parameters before you buy or sell a car?

The parameters include the service history, insurance history, criminal record, papers in the authority, all the invoices, in case if it is a second owner, the payment proof from the second owner to the first owner. So it is a huge list of things we check like physically inspecting a car, a technical check of the cars like suspension, tyres, the condition of engine and transmission. So that’s what we do.

When you have the technicalities cleared, do you have your own team of mechanics trained to check, for example, a Ferrari or do you call in the Ferrari technicians to inspect it?

I have my own trained team of technicians, it is all done in-house.

You have also mentioned that you are not selling cars that are manufactured before 2014. Can you tell us what the idea behind that is?

We want to sell good quality and fresher cars as compared to any other older cars. If any car is just two years or one year old, it is definitely much better than a car that is 6-7 years old and that is our quality parameter.

Do you have any thought for any vintage cars or classic cars which were sold in India, like decades ago; will you be having any line-up like that?

No, we don’t do classic and vintage cars and there are no plans as of now for that.

You have just two outlets now. How do you provide service to a person from the south or some other part of India?

We offer a flying doctor service, for regular vehicle servicing. In case of a major breakdown, the car definitely has to come down to Delhi or Mumbai.

What are your future plans for the brand? Are you planning anything in Mumbai or Chennai or Kolkata?

Mumbai, Hyderabad, and Kolkata is the plan now. In Mumbai, we had already finalised a property but because of GST it got scrapped.  The target for the next two years is Mumbai and Hyderabad.