The automobile industry in India is one of the world’s largest and most competitive. According to a report by the Society of Indian Automobile Manufacturers (SIAM), annual car sales in India could reach the 9-million mark by 2020. In addition to new car sales, there has been a rising trend in used car sales. Until a decade ago, the pre-owned car’s market in India was a disorganised sector and more than 60% sales of used cars happened within the known circle of the seller through local dealers, mechanics and word of mouth among friends and relatives – mostly on a customer to customer (C2C) level. But, now the market of pre-owned cars is a well-organised and certified business sector with Maruti Suzuki being the pioneers in this overhaul. In 2001, Maruti launched its segment of used cars under the brand name of Maruti True Value, thereby becoming the first major organised player to enter the used car market. And ever since, this segment of the automobile industry has not looked back. Mahindra’s First Choice, Tata Motors’ Assured, Hyundai’s HPromise, and Renault’s Selection are just a few of the well-known automakers that now offer specialized business lines for used vehicles. Additionally, German automakers Mercedes-Benz, BMW, and Audi have increased their focus on the used car market. The reason behind the growth of pre-owned cars market is not limited to popular brands endorsing themselves to this segment of the business; rather there are multiple factors for this uptrend. Price advantage, appeal to all types of buyers, sparse use of cars, improved quality, better maintenance, ease and transparency, warranty, credibility, availability of finance options, and demand for luxury cars are making this segment ever more acceptable among Indian car buyers. According to a CRISIL report, the ratio of new to used cars in India has grown from 1:1.2 to 1:2.2 meaning for every 10 new cars sold, 22 used cars are getting sold simultaneously. And, it is projected that this trend will continue to grow at a steady pace of 15% till 2020. There are reportedly less than 1,000 organized used car dealerships in India, and it is anticipated that this number will rise to almost 4,000 as demand rises. In addition, if the proposed uniform tax laws across all states get implemented then the process of selling and registration of used cars will become all the more simple and economical.
It has been observed and acknowledged by automobile giants that even though the industry went through a period of sluggish sales numbers in the last few quarters, the used car segment has had a steady growth. In fact, during the low sales of new cars, the used car market helped a number of manufacturers. With poor sales numbers dogging the industry, the used cars have come to provide succour to several manufacturers and the larger ones have enhanced the services and offerings to capitalise on this segment. Vinay Sanghi, CEO, CarTrade.com, an auto classifieds portal, observes the perspective of used car market by putting forth this comparison – the current market size of new cars in India is 2.5 million, whereas the used car market is soaring at about 3 million. Similarly, Mercedes-Benz India’s pre-owned car business brand’s CEO and managing director Eberhard Kern stated that the company’s pre-owned car segment grew 39% between January and September 2014, selling 1,700 units, indicating the market’s high profit potential. Well, the numbers and reports have clearly indicated that the Indian used car industry is indeed on a rapid growth path. Additionally, this expansion will continue in the coming years for all the right reasons. Utilized car loans from Tata Capitals can help you realize your goals quickly. Without any requirement of collaterals and low interest rates owning a second hand car is extremely easy today.
