Mahindra First Choice Wheels, for instance, saw growth in sales of used cars moderate in the past two quarters. From 15 per cent growth in FY19, pre-owned car sales grew at about 10 per cent in the June quarter of FY20, and is expected to fall in the range of 5-8 per cent in the remaining part of 2019, according to CEO Ashutosh Pandey.
“As new car sales come down, the demand for replacement also declines, slowly affecting the used car market.
But while the liquidity issue in non-banking financial companies
and uncertainty in minds of customers could be the prime reasons for dropping new car sales, affordability is the underlying theme of growing used car sales,” Pandey pointed out.
Maruti True Value too has experienced a tepid 2019. Sales at its used cars store grew at 8 per cent in April–August 2019, slower than the 17 per cent growth clocked in April –August 2018 data obtained from India’s biggest automaker shows.
In July-August 2019, True Value sales grew only at 6 per cent. Data from Maruti corroborates the affordability factor—small cars and hatchbacks such as Alto, WagonR and Swift are the top grossing models at True Value.
Showing a brighter trend, online players in used car market
are riding high. Olx, an online classifieds place for consumer-to-consumer transactions, saw a 15 per cent rise in listing of new cars in April-June 2019. The growth was similar in January-March 2019, when the new car sales had started bottoming out.
Sunny Kataria, vice president at Olx Auto, said affordability was a key factor here too, in addition to better cars being available in the pre-owned market. “Earlier, the pre-owned car market was dominated by granny cars. Now, relatively newer, safer cars are on sale, with valid registration and insurance coverage, which acts as a safe bet for most buyers,” said Kataria.