Used cars showcase stronger growth in current fiscal

The pre-owned segment of cars is expected to showcase a growth by 15-18% in this financial year. Within this segment, the organised sector is witnessing a growth by 40% annually. At present, 15% of transactions take place in the organised sector of pre-owned cars; rest of the transactions takes place in unorganised market.  

The next five years in automobile industry are going to observe double size for used cars market in comparison to the new cars. And, that means the pre-owned segment of cars will carry out a sale of 5 million units per annum by 2019/2020.

Reasons for growth
•  A strong growth of around 14% from 2007-08 to 2011-12 in new car segment, which further lead to huge used cars’ inventory
•  Change in consumer behaviour with reference to vehicle ownership. The duration of 5-8 years before replacement has gone down to 3-4 years.
•  Decrease in the difference between diesel and petrol prices has enhanced demand for pre-owned diesel vehicles.
•  A low population of pre-owned diesel cars

At present, around 2.5 million pre-owned vehicles are disposed in a year which takes the value of industry to over Rs. 40,000 crores.