Used Car Sales In India Continue To Grow
India’s auto industry has been through a few rough patches in the past couple of years and new car sales have been hit. However, even during these challenging times, the used car market in India has witnessed steady growth. As per available data, the current value of the pre-owned car market is pegged at Rs. 96,000 Crores as compared to the Rs. 38,500 Crores level recorded in 2011. Analysts also predict that this growth will continue for the foreseeable future with the used car market reaching a level of Rs. 250,000 crores by the year 2021.
Key factors that have propelled growth of this segment include shorter ownership cycles, improved quality of cars and emergence of larger organised dealerships in the used car segment. Aided by these factors, the used car segment is expected to grow even further in the coming few years. Leaders among the organised players in the current market include Maruti Suzuki’s True Value as well as those sponsored by Mahindra, Volkswagen and Renault.
At present, the organised sector accounts for 12% of the pre-owned car sales in India, while this level was recorded at just 8% in the year 2011. If the current rate of growth persists, this percentage is expected to rise to 18% and reach 1.2 million units in 2nd hand car sales by the year 2021. One of the key changes as the segment evolves is the increased availability of financing options. Earlier, only a few NBFCs were offering loans for used cars, but this has now changed with almost every major bank in India offering a car loan for used vehicles.