With more and more people choosing to buy second-hand cars instead of new ones, the used-car market is likely to be double the size of the new car market by 2018.
According to this Business Standard report, used-car sales in India at 3.22 million vehicles are 1.2 times the sales in the new car segment.
More people are buying second-hand cars as the market has become more organised. Interestingly, they are choosing second-hand cars despite having money to buy new ones.
Reuters
With a strong domestic growth for new vehicle sales during 2008-12, there has been an increased inventory of used cars. Several such trade-in cars are refurbished, thoroughly checked and put on sale usually with a warranty by organised players.
The BS article notes that the entry of new players is expected to increase the share of organised market and hence lead to more growth in the used-car market segment.
Mahindra First Choice Wheels, the largest multi-brand used-car company, is all set to increase the count of outlets to 1,200 by 2019. Jagdish Khattar, former managing director of Maruti Suzuki, who had floated Carnation Auto, a multi-brand used-car network, plans to open 200 showrooms by 2015-16.
"There is a huge growth in the used-cars industry in the last few years, compared to the new cars segment. With the entry of more organised players in the segment it will further increase and we are set to tap this potential," Khattar told the BS.
Maruti Suzuki dominates the used-car demand with most consumers buying Maruti Suzuki models such as Wagon R, Swift and Alto and Hyundai models such as the Santro, i10, i20.
Another reason for the growing used-car market is an increase in supply of used cars because most owners these days do not hang on to cars for more than three years, notes an Indian Express report. And with strong bargaining skills, one can easily fetch a refurbished used car at less than half its original sticker price.
Some experts also say the economic slowdown and the fall in the value of the rupee have also helped the second-hand car market to grow. The depreciation of the rupee, among others, has also meant an increase in input costs, leading to prices of cars being raised even as demand was falling.
As a result, the used-car segment has witnessed a 22-25 percent rise in sales during April-July 2013 as against a 9.7 percent decline in new car sales in the same period, industry experts said, notes the IE report.
via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEeuWfsfRD7a8wmg6SXAvBtbkuM-Q&url=http://www.firstpost.com/business/slowdown-impact-why-used-car-market-sees-brisk-business-1224215.html
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