AMSTERDAM — According to Umang Kumar, co-founder and CEO of India-based CarDekho SEA, financial services play a pivotal role in used car sales in emerging economies. 

Kumar, who noted that the company was planning an IPO “sometime early next year,” said that the distribution of used cars in emerging markets was fragmented and highly unorganized, with many dealers selling no more than eight or ten vehicles a month and spending virtually nothing on marketing. 

Since 2015, CarDekho has operated an asset-light auto finance marketplace model that has zero credit or inventory risk. 

Kuman said the aim was to “build a value proposition for our core customer — the dealer,” providing Inventory financing for partner dealers. 

CarDekho is now expanding into such markets as Indonesia and the Philippines. 

Kumar noted that interest rates for used car dealers in these countries were even higher than in India — around 15% in India, 24% in Indonesia and 30% in the Philippines. 

This enables CarDekho to earn high spreads — 8% in Indonesia, for example — as a “distribution partner.” 

Kumar was speaking on the second day of the AIM Group’s AutosBuzz conference. 

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