The current situation is a bit troublesome if you consider the economic situation. People are wary of spending on wants and needs have taken precedence. Amidst all this, personal mobility has emerged as the safest option to commute as things are returning back to normal.
Many existing car owners who were considering a new purchase have put their decision on hold, while those who never felt the need for one until now, or were considering a purchase, are taking the used car route for reasons related to savings. This spike in growth in the used car sector isn’t recent though, as the slowdown prior to the pandemic had already caused a surge in that space.
The rising trend of pre-owned cars
According to OLX’s ‘Auto note’ car industry survey, the digital consumer-to-consumer marketplace has reported a substantial 25 per cent increase in demand for used cars till early July. The said data is compared to the levels observed in February earlier this year. For the uninitiated, pre-owned car industry already churns out more numbers than the new car market and if the recent trend is anything to go by, it is expected to grow even further.
Another prime reason for this surging trend could be the high price of new cars. The transition to BS6 and the economic slowdown caused by the pandemic has resulted in carmakers increasing the prices of their offerings and transferring the additional cost to the customers. People aren’t earning as much as they used to before the pandemic wreaked havoc and adding to that is the uncertainty that lies ahead as companies are laying their employees off and salary cuts have become the new norm.
The credibility of the report
The data concluded in the report seems believable because the study by OLX included responses from 3,800 individuals collected over the months of March-June 2020, in addition to inputs from 4,50,000 buyers and sellers on its digital platform. The study also revealed that more than half of the users are planning to buy a car in the next 3-6 months and out of them, one-fifth have shifted their preference from new to used cars due to financial stress. A similar study was conducted by the Laqshya Media Group. It was conducted to help marketers figure out the perceptions, aspirations and anticipations of the Indian Millennial via-a-vis the ‘New Normal’ that the world faces today.
The younger people, 18-25, shared that they will hit the malls in an average of 23 days while the 25-39 cohort’s average wait time was 29 days! But 31% of the targeted group are more likely to use personal travel more frequently as compared to earlier. Around 12% to 14% of respondents intend to buy a car or a two-wheeler over the next 12 months as assets.
With the prices of new vehicles soaring higher every day as manufacturers roll out price hikes, the shared mobility scenario isn’t looking great either. Pool rides are a thing of the past now and that has certainly made hiring cabs a bit expensive than before. A few clicks on the internet also revealed that those selling their cars are also reaping the benefits of this growth unless it is a distress sale.