Industry

Used car market to overtake new car sales

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.


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Printable version | Sep 28, 2021 2:13:53 AM | https://www.thehindu.com/business/Industry/Used-car-market-to-overtake-new-car-sales/article11219748.ece

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