Used car market in India is increasing gradually and as per the latest reports is higher than the new car market.
There are many reasons behind this gradual increase and reports say that it will increase further.
Better build quality
Over a period of a decade or more, it has been observed that most of the automotive companies have started exporting cars out of India. Primarily because India comes in low-cost countries where the cost of making a car is cheaper than most of the developed nations. This concept has been parallelly deployed in almost all the automotive companies who have their footprints in India.
When it comes to the standards with which a car should be on the road, India still lags but other markets have stringent requirements because of which the cars that are made in India must be made considering a stringent set of requirements.
Except for some specific parts of the car, the majority of parts are common! Another aspect is no one can afford to make two totally separate pieces of the same model, one for local market and another for export purpose. Even though they can afford, they will not because it will be a bad business case. Positive effect because of this phenomenon is the increase in overall quality of the car even for catering Indian requirement.
All this implies that cars on the road are of better quality rather better quality across all aspects. This implies that consumer can use a car for more time rather it can run for a longer time.
Options
If we go further back in time and recollect the number of options that were available for consumers while deciding to buy a new car or a used car, then without a doubt the conclusion will be very less. Gradually with so many players coming in, options in each segment increasing; today we are in a situation where in every segment, there are multiple options and it’s still growing.
This has led to a wide range of options being available for all types of consumers. For a middle-class consumer, the options are endless and this is evenly spread across both the verticals; new cars and used cars.
New Launches
It looks like every car manufacturing company wants to make their roadmap to success starting from entry level hatchback segment only. Considering India to be a highly cost competitive market, when consumers interested in new cars have a tough time finalising one car for them out of the bunch, the situation for consumers interested in used cars is not easier! Easier doesn’t mean tough, but it means that consumers will take more time in choosing what is the best for them.
How will it benefit used car market?
As per latest reports, more the number of cars in the new car vertical; more will be the number of cars available for sale in the used car segment.
Based on reports from The Economic Times, the growth of used car market has been stable. In 2011, it was 1.6 million units whereas today it is worth 3.3 million units and is expected to grow to 6.6 million units by 2021.
This has also got a boost inherently as the ownership of a car has also reduced gradually from 6-7 years, 5 years ago, to around 4 years today.