The importance of vehicles in today\u2019s\nmetro cities is being felt by one and all. The importance of four-wheeler is\nmuch more as it helps in many ways. This purchase takes place depending on the\naffordability; either it can be a new one or a used one. The history of the car\nmarket in India shows a sea of change has taken place in the last few decades.<\/p>\n\n\n\n
India\u2019s automobile industry is a fast-growing\nindustry and at presently is ranked at 6th<\/sup> position in the world. According\nto the reports, the automobile market can reach 9 million vehicles by 2020.<\/p>\n\n\n\n Fast-growing\npre-owned Car Market<\/strong><\/p>\n\n\n\n Till about a decade back, this segment\nwasn\u2019t an organized one, due to the lack of organized players in the market.\nThe only circle that existed for purchase and sale of pre-owned cars were\nclosed friends and relatives. The other sales were done by local players, who\ndidn\u2019t follow any fixed model to fix car\u2019s selling or buying costs. The first\nmajor player to enter this market was Maruti with its new used car brand,\nMaruti True Value, in the year 2001. <\/p>\n\n\n\n As the Market increases the segment of the\npre-owned car market is also expected to grow. Previously most of the cars in\nthis segment were sold by unorganized dealers and in between friends and relatives\nonly. But in the past 7 to 8 years, this market also became organized with\nmajor manufacturers like Maruti & Mahindra entering this market. <\/p>\n\n\n\n The advantages with major players entering\nthis segment are \u2013<\/p>\n\n\n\n Car\nbuyers entering the ownership for the first time<\/strong>:\nDue to the lower cost and a variety of choice, the first time used car buyer\ngets technical know-how of the product, and can choose from a wide-range of\nused cars at a fair price. <\/p>\n\n\n\n Customers\nin need of additional Car<\/strong>: In metro &\nmini-metro requirements of several Indian families, one of them is to have more\nthan one car and used cars offer them a more economically viable option. <\/p>\n\n\n\n Up gradation<\/strong>: A used car allows car owners to have the\nopportunity to upgrade from a low segment car to high segment car or from\ntwo-wheeler to a four-wheeler without stretching their budget. <\/p>\n\n\n\n The segment of pre-used cars has become\npopular due to increased disposable incomes in towns & metros. All this has created a situation where people\nwant to upgrade their vehicles more frequently. Apart from these obvious\nreasons, there are other benefits that make buying a pre-owned car a popular <\/p>\n\n\n\n Current\nstate of used car market in India<\/strong><\/p>\n\n\n\n In\nvarious countries across the Globe, the sale of used cars is very high in\ncomparison to the new ones. In Europe, this ratio is 1:2, while currently in\nIndia it is 1:1.1 and expected to become 1:1.3 by 2018. In mature markets, the\nnumber of new car buyers is increasing, while the number of used car buyers is\ndeclining. In India, however, the trend to purchase used cars is on the rise.\nThis can be attributed to various reasons like rising cost of fuel and\nincreasing disposable income. Though the general economic slowdown and demonetization\nhave hit new car sales numbers, the used cars market has seen an uptrend,\nclearly indicating that used cars will continue to move forward. <\/p>\n\n\n\n There are several reasons for the\nevolution growth of the used car market in India. Important among them are as\nfollow:<\/p>\n\n\n\n \u2022 Car quality: Due to technological\nadvancements, the cars now have an improved and longer life. <\/p>\n\n\n\n \u2022 Improved maintenance: A change in\nquality and improved performance of spare parts cars have become easier and\nbetter to maintain. <\/p>\n\n\n\n \u2022 Change in lifestyles: Urban families\nhave more than one car. Usually, the second and in some cases, the third car is\nnot used much. The condition of such cars is excellent, and thus, they become a\ngreat option to be bought as a used car. <\/p>\n\n\n\n Technology access: Surfing the World Wide\nWeb, for knowledge regarding the latest models and improved versions, have\ngiven rise to needs and improved knowledge rather than relying only on\nadvertising. <\/p>\n\n\n\n Certified players in Market: People do\nprefer to sell\/buy used cars through self-appointed used car dealers because\nthey could not be sure of the quality as well as the history of the cars sold. <\/p>\n\n\n\n There is a huge scope for growth as most\nof the used car market remains untapped.<\/p>\n\n\n\n CRISIL\u2019s data reveal the growth in used\ncar sales volumes and clearly indicate that the growth prospect for used cars\nis more as compared with that of new cars by 2017. Also, since the ratio of new\nversus used cars in India is still 1:1.1, the old car market will grow much\nfaster than the new and within that segment, the organized sector will grow the\nfastest to bring the ratio closer to the 1:3. That\u2019s the norm in developed\nmarkets. <\/p>\n\n\n\n The future of the used car market <\/strong> <\/p>\n\n\n\n The used car market in India is expected to grow at a CAGR of 20 percent in the next five years, with the organized sector playing a big role in this growth story. At present, there are nearly many organized used car outlets in India but concentration is only in metros and two tier cities. In order to keep up with the projected growth, there is a demand in these areas as well as other cities and towns. All eyes are on implementation of GST, as it brings uniformity in prices, across the country, thereby making it economical to buy\/ sell across the country.<\/p>\n\n\n\n