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Maruti Suzuki Reviewed Its Memorandum Of Association To Embrace Web-Platform Business

Friday, 29 January 2021, 03:31 Hrs

The country’s largest carmaker Maruti Suzuki on Monday revised its memorandum of association (MOA), or constitution, to include operating a web-based sales platform as a business activity indicating the company’s increased focus on developing an online sales ecosystem.

The new activities include operating and maintaining a web-based platform for the sale of goods and services, charging a fee for providing this platform and providing advertising space to third parties on such a platform, among other things, as per a clause added to the company’s MOA. The MOA governs the rules and regulations of any company’s association with outside.

The company had last month launched a car finance platform called ‘Smart Finance’ that would connect buyers to lenders and it is understood that the company’s MOA has been updated to reflect this activity. Given that every second car sold in the country is made by Maruti Suzuki, it gives the company excellent leverage to monetise such a platform as it connects its buyers to lenders.

“As much as 57% of all car buyers research online for financing solutions after deciding to purchase a vehicle. When they go out of our system to research finance options, the conversion process slows down. At times, customers change their mind about the type of vehicle they want to buy,” Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki said during the launch of Smart Finance.

Nearly 80% of customers at Maruti Suzuki avail of financing solutions while purchasing a vehicle. The platform offers features like checking for pre-approved loans for buyers, customising the EMI and tenure of the loan and various other funding facilities that some third-party platforms currently offer.

While the facility has been launched for Nexa customers in 30 cities in association with eight financiers, the company plans to extend it across its outlets in India and tie up with more finance partners.