Used car sales to surpass new car sales
The slumped car market in India is not likely to affect the used car business in the nation which is flourishing bountifully. The market experts estimate that the old car business is likely to register a growth of 20-25% in the next few years, which is apparently 18 lakh units this year, is likely to touch the 40 lakh mark by 2015. The organized sector of the used car business alone is hoped to attain a 30-40% growth. The Indian new car market which was expected to grow by 13-15% is however going to just scrape by single digits is what the industry insiders say.
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As per an executive at a multi brand sales and service venture that deals with the used car sales , said that the current new to old car ratio is 1: 1.1 which is more likely to reach 1: 2.5 to 1:3 in the organized sector of the used cars business registering a major growth in the used car sales. He has also reportedly added that the used car business in India is too small to attain 20-25% growth, however, the organized sector is also very small making about 10-11% of the car market, the 35% - 40% growth in the organized sector doesn’t seem to be large enough.
According to Rajeev Dubey of Mahindra and Mahindra’s retail used car business, Mahindra First Choice is known to have said that the used car business is thriving at 30-35% growth in the organized sector of the used cars out of which, the certified used car business is growing the fastest. He has also remarked that, in the U.S., while the new car market slowed down, the used car business picked up, where-as in India, at the moment, both the used cars business and the new car business seems to be at par, but the recession is less likely to impact the old car business. Nevertheless, the supply side of the old car market might suffer as the people are more likely to hold on to their old cars during the economic slowdown, even if the demand side is impacted, there-by neutralizing each other.
The luxury car buyers are keeping the used car business hot, as a prospective customer of a luxury cars prefers to go for a 15 month old Mercedes-Benz or BMW with 15,000 km on the board available for Rs 25-28 lakhs compared to its Rs 37-45 lakhs for a brand new car.
