The automotive industry in India is one of the largest automotive markets in the world. It was previously one of the fastest growing markets globally but is currently experiencing flat or negative growth rates.
Despite the automobile industry witnessing sluggish sales numbers, the used or pre owned car segment is growing fast and is likely to grow in future. Although the pre owned car’s market has been around for some years, it has gained leverage quite late with more car purchasers gradually turning their focus to it. With poor sales numbers noted in the industry, the used cars have come to provide a boost to several car makers who have enhanced their services and offerings to tap on this segment.
The idea of having a used cars division has already been realised by car makers like Toyota, Hyundai, Maruti Suzuki, and also by the luxury car majors BMW, Audi and Mercedes-Benz. Companies are also offering certified used vehicles along with multi-point inspection programs with lucrative discounts and offers.
Used Car Dealers in Chennai
The used car segment is immune to demand fluctuations to a large extent. According to the chairman of one of the largest multi-brand player in the segment, the impact of the Indian economy on the used car market is less than it is on the new car market because in the used car business, the volume is generated by cars changing owners as well. The business of used car is nearly 1.3 times larger than the new car market and is growing at a more rapid rate as per former Maruti Suzuki managing director Jagdish Khattar.
The used car segments help the automakers to introduce their brand to car buyers even if a new car model is beyond their reach. Many manufacturers already have set up flourishing businesses under their own brands like Mahindra First Choice among others. In the recent past, German giants car makers like Audi, BMW and Mercedes-Benz also have increased the attention on this segment.
As per the study by one of the leading auto portals in India, buyers of used cars in Chennai tend to prefer older cars compared to other cities in India. People of Chennai would still prefer the tried and tested Maruti Suzuki 800, while the rest of India would probably have moved on to newer models of cars.
The sales data comes as India’s pre owned car market experiences a boom and is expected to overtake the sales of the new car in a few years. The average period of car ownership is declining, which is leading to the used car market’s rise. While the growth of new car sales has stagnated, sales of pre owned cars are growing around 20% a year. If this is to continue, If the used car market will be double the size of the new car market in volume, within the next four or five years.
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