25 May 2021
Posted in Automotive
Used car market to recover faster than new sales post COVID-19 second wave unlock in India, says GlobalData
Following the news that Maruti Suzuki India registered a drop in sales of pre-owned cars by around 36% last fiscal year and that other OEMs also witnessed decline in used car business;
Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:
“The annual volume range of used cars is 1.5-2X higher than that of new vehicle sales in India. However, used car sales have been reeling under the second wave of the COVID-19 pandemic, after a significant negative impact during the first wave. As per the news reports, of the 570 Maruti Suzuki’s True Value outlets about 416 have witnessed slump in their used car business. Maruti Suzuki saw a decline of 36% in the used car business last financial year.
“OEMs such as Maruti Suzuki and Toyota and Mahindra & Mahindra are optimistic about the long-term growth of used car business despite the recent decline, both in organized and unorganized sector. OEMs expectation stands valid given the present market dynamics in India as there has been a significant shift towards personal mobility with the advent of COVID-19. Furthermore, the weak economic growth and resultant sluggish consumer spending tends to make used cars a more affordable option for price conscious customers.
“Used car market in India has witnessed significant positive development in the recent past. With the existing untapped opportunities there has been an increased development to make market more organised. OEMs such as Skoda launched their pre-owned program and online marketplace OLX launched franchisee-led pre-owned car retail stores in various tier 1 and tier 2 cities. Post the second wave unlock and favorable market dynamics, the used car market is anticipated to recover faster compared to the new sales in near to mid-term.”