Used car market to overtake new car sales

Hatchbacks and Sedans are the preferred segments. And though, SUVs and luxury cars have a good demand, the supply is still low.

August 29, 2014 03:20 am | Updated November 12, 2016 04:04 am IST - NEW DELHI

In this file photo, used cars on display at a showroom in Chennai.

In this file photo, used cars on display at a showroom in Chennai.

India’s used car market is expected to grow up to 2.5 times the size of the new car market, driven by growing acceptance of used cars, rising aspirations and expansion of organised sales channels.

The trends in this segment largely remain the same as that of the new car market. Hatchbacks and Sedans are the preferred segments. And though, SUVs and luxury cars have a good demand, the supply is still low.

“Used car being a depreciated asset, the buyers get their aspirational car at affordable prices. This gratification is the driving force of the industry,” a spokesperson from Honda India, which runs exchange and pre-owned car division Auto Terrace, said.

Eberhard Kern, MD and CEO, Mercedes Benz, who is also running a used car business in India, said, “Indian buyers will go for cars they desire if they fall in their budget. People are looking for luxury, looking at upgrading… aspiration is clearly there. We have over 50,000 Mercedes running on Indian roads; this presents a big opportunity for us in terms of used car market.”

Talking about the average buyer profile, Amit Kaushik, Principal Analyst at research firm IHS Automotive explained that nearly 40-45 per cent of the used car market comprises of people, who are below 30 and want to upgrade from a two-wheeler to a car (a hatchback or a sedan).

Brand presence The fact that nearly every car maker in the country, including Maruti Suzuki, Hyundai, Mahindra and Mahindra, is present in the segment is also helping the market grow.

Kaushik pointed out that people who buy from the unorganised market are the ones who opt for a new car in the second purchase due to lack of any warranty or good after sales. However, a majority of used car owners who have made the purchases from organized sector are very likely to go in for another used car the second time purchase.

Online sales Emergence of websites such as OLX, Quikr, Cartrade and Gaadi.com, among others, that allow customers to post free ads to sell cars is also helping the segment gain traction.

There are almost half a million ads for used cars listed on OLX’s website alone which gives an indication of how big the online used car space is.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.