The new lending-as-a-service platform will allow car manufacturers, dealers, aggregator platforms and lenders to offer digital retailing to their customers
Riding on the ongoing digital wave and growing preference for online car purchases, Volkswagen Finance-backed automotive fintech platform Kuwy on Thursday launched ‘KUWYLaaS’, an end-to-end digital lending service for online car trading platforms.
The new Lending-as-a-Service (LaaS) platform will allow car manufacturers (OEMs), dealers, aggregator platforms and lenders to offer digital retailing to their customers.
“The technology innovation in the KUWYLaaS will not only eliminate all the challenges associated with online car sales today but also provide deeper insights that will enable the completion of online transaction at the point of search by providing a better buyer experience,” B Ganesh Kumar, CEO & Co-Founder, Kuwy, said at a virtual press conference.
Founded in 2017 by Kumar, the Chennai-based automotive fintech platform connects dealers, lenders, OEM’s and customers digitally. It simplifies auto loans by facilitating end-to-end digital loan approval, processing and disbursal. While its existing offering ‘Kuwy Prime’ is focused on instant lending at dealership level (point of sale), the new platform ‘Kuwy LaaS’ will focus on point of search, which includes websites of OEMs, dealers, car marketplace and aggregators.
Kumar said the addressable market for new and used cars in India is ₹1.5-lakh crore if one takes into account the annual car sales in these segments. He added that finance penetration is only around 20 per cent in case of used cars and 70 per cent in case of new cars.
Currently, only 22 out of every 1,000 Indians have a car and this is expected to go up to 50 per 1,000 Indians in the next five years. This kind of growth is possible only with the help of digitisation, Kumar added.
Used car sales set to grow
In its recent report, internet-focused consulting firm RedSeer said, by FY26, used car sales were expected to grow up to 8.3 million units, growing at a healthy CAGR of 11 per cent.
“It is estimated that most new car dealerships are now connected online via the OEM online network, and benefit from targeted leads(via OEMs and auto portals). Out of the ~30,000 used car dealerships, at least 4,000 are spending consistently on online auto portals,” the report said.
Kuwy has partnership with over 4,000 used and new car dealers, more than 25 banks and NBFCs for used cars lending and 8 banks for new car financing. Currently, 40 per cent of its dealer partners are based in the South, followed by North (30 percent), West (25 percent) and East (5 percent).
The automotive fintech is planning to partner with 20,000 dealers in the next four years and strengthen its market in West, North and North-East regions in the future.