Mumbai, Sept 16 (Agencies): The demand for used cars is being driven by smaller towns and cities as stricter regulations, especially on emissions, and changing consumer preferences in major cities lead many to discard their older cars for new vehicles.
Sales of pre-owned cars are estimated to increase to as many as 4.4 million units this fiscal from 4 million in the previous fiscal, according to used car dealer Mahindra First Choice Wheels. Online classifieds platform OLX India has an almost similar sales forecast of 4.4-4.5 million units.
‘Car owners in metropolitan cities change their vehicles faster. Secondly, when government notifications ban vehicles such as petrol cars older than 15 years and diesel cars older than 10 years in Delhi-NCR, where do these vehicles go? They are sold in the used car market, refurbished and then sold again in the smaller cities and towns,’ said chief executive of Mahindra First Choice Wheels, Ashutosh Pandey of the used car selling arm of Mahindra and Mahindra Ltd. He said Delhi-NCR, Mumbai, and Bengaluru comprise the bulk of supplies of used cars.
Vice president of auto at OLX India Sunny Kataria said demand for used cars from tier-II cities increased 10 per cent in the second half of fiscal 2019. ‘While supply of pre-owned cars largely rests on tier I cities, the demand for the same is increasing in tier-II and smaller cities,’ Kataria said.
India’s used car market can be broadly categorised into OEM (original equipment manufacturer) retail franchisees, classified players, consumer-to-business and other transactional platforms. Robust demand for used vehicles comes at a time when the automotive industry is experiencing sharply weakening demand.
Passenger vehicle sales in India plunged 32 per cent from a year earlier in August to 196,524 units, according to the Society of Indian Automobile Manufacturers (Siam). It was the 10th straight decline in monthly passenger vehicle sales and the worst since Siam began compiling monthly sales data in 1997-98.