Report – For every new car sold, there’s a sale of a pre-owned one


Paranjay Dutt,

Likes to read, write, and talk about automobiles whenever he can. The rest of the time, he can be seen behind his camera. Totally fails at writing Author Info, though.

Survey says new and used car sales this year will be at 25 lakh units each.

The Indian market has come a long way from the time when buying used cars was considered unsafe. Buying from an unknown dealer situated deep in the bylanes of a city is still going to induce apprehension, but thanks to the larger (and more trust-worthy, of course) used car dealership chains, buying a pre-owned car is as easy as getting a new one.

Maruti Celerio wheel at the 2014 Nepal Auto Show
The ratio in developed markets stands at 1:3 in favour of new vehicles.

This fact is being reflected in Frost & Sullivan’s latest market survey, which concludes that the ratio of sales of used cars to new cars has become 1:1 in India.

While the new car market still struggles to find more customers each year, what’s driving them to buy used cars is because the latter appears to be more cost-effective in the face of rising fuel prices and high interest rates.

With most carmakers having their own used car businesses, which offer warranty and free-service like on a new car, buying a pre-owned car becomes all the more easy. Maruti’s True Value used car business, for example, has grown sales 34% in the first half of the year. Mahindra First Choice used car business is reported to have grown by 20% YoY.

2014 Ford Figo rear at 2014 Auto Expo
By offering warranty, financing and free services, manufacturers have made buying used cars easier and attractive.

According to JD Power, many first-time customers are skipping entry level vehicles in favour of cheaper used premium hatchbacks or entry level sedans. The firm says that the number of customers considering a used vehicle has jumped from 4% in 2011 to 17% in 2014.

[Source: Economic Times]

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