Nagendra Palle, MD & CEO, Mahindra First Choice Wheels Ltd, speaking at the release of India Pre-Owned Car Market Report, 2016 in Mumbai (Pic: Suryakant Niwate)
With better roads and more disposable incomes, buyers in non-metros are boosting the demand for pre-owned cars, rather than their metro counterparts.
According to the India Pre-Owned Car Market report, released by Mahindra First Choice Wheels, on Tuesday a little less than half (45 per cent) of all pre-owned cars are sold in metros. The rest of the demand is generated by buyers in non-metros.
Non-metro markets have been growing faster than the metros. North India accounts for 36 per cent of all used car sales, followed by west (27 per cent), south (26 per cent) and east (11 per cent). The pre-owned car market in India is 1.2 times larger than the new car market. The ratio is much higher than China, whose used car market is half its new car market.
LEADING THE LINE Around 45% of all pre-owned cars are sold in metros
North India accounts for 36% of all used car sales
Pre-owned car market in India is 1.2 times the new car market
Organised players make up 12% of the 3.3-million old cars segment
It is growing at over 15% a year
According to the report, about 50 per cent of buyers are in the 25-34 years age bracket. The average age of a pre-owned car soled is four years, with the average price being Rs 3-4 lakh.
For more than 55 per cent of buyers, a pre-owned car is the first in their family.
Nagendra Palle, managing director and chief executive, Mahindra First Choice Wheels, said, “Over the past 24 months, the pre-owned vehicle sector has been the subject of much attention from a number stakeholders. However, little is understood about the sector because of a severe paucity of data.”
Organised players make up 12 per cent of the 3.3-million old cars segment. It is growing at over 15 per cent a year, powered by first time buyers. There are nearly 30,000 dealers in the segment.
While India's pre-owned car market is supply constrained with inventory at dealers under 30 days as against traditionally more than 60 days in the US. Repossessions account for 80% of the wholesale market.