Used-car market as large as one for new cars: survey

The used-car market in India is estimated to be as large as the new-car market, said a survey by Deloitte India.

“The used-car business has been one bright spot in a slow growing automotive industry in the last few years,” said a report, ‘Driving through the Urban Used-Car Market,’ by Deloitte. “The rush to buy diesel cars a few years ago with the prices of petrol being pegged to the open markets, and then sales going down on account of inability of the customers to buy new cars led to a visible growth in the used-car volumes.”

The international consultancy conducted a survey across 16 cities to track the used-car market. According to Kumar Kandaswami, partner, Deloitte India, there is a clear preference among buyers for branded cars. “With formal networks growing, it is increasingly becoming cool to buy used cars,” he added.

Manufacturers are also investing in dealer networks and branding, enabling customers to consider used cars as a viable option. According to the survey findings, most customers prefer to buy two to four-year-old cars. A majority of people buying used cars are first-time buyers.

“Customers are willing to extend their budgets up to 20 per cent and the nature of the dealership seems to have an influence over this decision,” added the Deloitte report.