‘Sales of used cars zip past new car business’

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Thiruvananthapuram, Dec 17 Consumer aspirations in urban India are on a never-before overdrive, if the database on the country’s recent passenger car sales collated by an auto portal is of any indication. And surprisingly, its the used car business that’s in top gear.

While an average car owner changed vehicles once in 7-8 years till a year or two ago, in the current fiscal the trend is to change cars once in 3-4 years, according to the empirical findings of AutoIndia.com Online.

As the rate of changing cars doubled, the fasttrack growth is on the used car segment. From 1:1, the new car sales to used car sales ratio is rolling towards the US counterpart of 1:2.5 ratio, V Chandramouli (CEO, AutoIndia.com Online) told FE. “What pushes the secondary market is the entry of organised sector players like MUL and Mahindra to this segment,” he observes, based on database culled from about 25,000 car dealers all over the country.

These findings roughly tally with the industry projections that the new car market is pegged to grow 17-18% this year, while the used car market is more buoyant at 25% growth this fiscal. Last year, 1.4 million new cars were sold, as per SIAM (Society of Indian Automative Manufacturers) figures. Since as much as 80% of the used car market is spread out in the unorganised sector, there is so far, no countrywide comparable data.

Car sales are most vibrant in Delhi and Punjab region, if the info-base drawn from 35,000 car dealers in the country gives the big picture.

In fact, leveraging on the shift, AutoIndia.com is readying to come out with a car e-auction site within three months, Chandramouli said.

In August 2007, the automative portal felt a dramatic burst of sales in the following order of metros: Delhi, Bangalore and Mumbai. The customer profiles show that IT yuppies graduating from fancy motorbikes to cars, prefer buying a used premium brand car to a new low-end car.