The pre-owned car market hasn’t been that popular in India. It is only in the past 10 years that it has caught hold of buyers. In countries like the USA, the pre-owned car market makes as much as double the sales of the new car market, if not more. This market not only incorporates the ‘vintage’ or ‘classic’ cars but stretches to all automobile genres.
Reasons behind the prediction
Now, even India is taking a step forward, in terms of the pre-owned car industry. With an increase in the number of buyers, a rise in the number of dealerships, ease in financing, and an overall spread of the automobile culture and fanatics; the coming five years appear to be very fruitful for the pre-owned sector, with an estimated 15% growth rate.
A big reason behind such a boom is the pandemic. Before 2020, people had become dependent on public transport options like Ola & Uber and were not willing to buy automobiles. Seeing the havoc caused by COVID-19, many people shifted their focus from public transport to personal mobility solutions. While public conveyance is cheaper and less hurtful to the environment, private vehicles are more convenient and offer a greater sense of security and more importantly, hygiene.
What does the study indicate?
In a study conducted by ‘OLX-CRISIL’, they found out that the pre-owned car sector is expected to achieve a growth rate of 15% by FY22, in comparison to an estimated 10% growth rate of the new car industry. Amit Kumar the CEO of OLX said,” The preference for personal mobility has propelled a huge swing in favor of used-car sales that are expected to reach a phenomenal 1.5x more than that of new car sales over the next five years.
The digital switch has been highly transformative, bringing in its wake increased transparency, trust and a huge choice of new-generation vehicles to the consumer,”. The study also suggests that the pre-owned car industry will have a sales bump from 3.8 million units in FY21 to 7 million units in FY26.
Though owning used cars is not as good for the environment as using public transport, they still go a small distance towards sustainable development, as a single car is being used and then reused for a longer period, reducing the amount of scrap being produced in the form of discarded or abandoned cars.