Used Car Market in India – A used car, a pre-owned vehicle, or a second hand car, is a vehicle that has previously had one or more retail owners.

Dinesh Choudhary

11 years ago

The growth in the Indian car market has helped the sale of

both new and used cars in the country.

A used car, a pre-owned vehicle, or a second hand car, is a vehicle that has previously had one or more retail owners. India’s new car sales may be flat or negative but the 2.5-million-unit strong used car market is clocking top gear growth.

Every new car sold in the country so far this year a used car was also sold, according to consultancy and market research firm Frost & Sullivan. It expects sales of both new and used cars to be 2.5 million units each this year. In developed markets, the ratio of new passenger vehicle sales to used passenger vehicle sales is 1:3.

At present, mostly entry-level car buyers go for pre-owned cars. Industry insiders cite two main reasons for the growth in used-car business. First, economic uncertainties have made many prospective first-time car buyers cautious about spending money, hence, many are actively considering used cars. Second, most car-makers have developed a branded used car business that allows customers to buy pre-owned cars certified by original manufacturers and backed by warranty.

“Customers do consider used vehicle as an alternative option and this has been an increasing trend in the recent past,” said N Raja, senior VP and director for sales & marketing at Toyota Kirloskar. Mahindra First Choice, the pre-owned vehicle business of M&M, is growing four times faster than the new car sales, said Nagi Palle, CEO at Mahindra First Choice Wheels. While the new car market has grown 4%-5% so far this fiscal, MFC has grown about 20% year-onyear, he said.