Sales of new motorcycles and scooters do not reflect a positive number, but the aftermath of COVID-19 has definitely upped the sale of second-hand bikes. The market for second-hand bikes and cars is witnessing more sales as compared to previous years. These sales figures are attributed to two main reasons, one being the bid to avoid public transport during the pandemic, and the second being the financial constraints of purchasing new vehicles. In a survey conducted by Cars 24, an online platform for buying and selling used cars, 46% of the general public claimed a decline in the purchase of new vehicles due to a budget crunch. While 50% were in favour of pre-owned vehicles because it not only solved the purpose of privacy during a commute but was a cheaper and more viable alternative.
Hero MotoCorp, one of the world’s largest two-wheeler makers, recorded a fall in domestic sales from 616,526 units of motorcycles and scooters in June 2019 to 450,744 units in June 2020. However, despite its fall in sales, the giant automaker saw a significant growth of over four times from May 2020 where they dispatched 112,682 units. Economic uncertainty and lower discretionary spending are making buyers wary about spending on new vehicles. In these highly disrupted months, the sale of second-hand bikes is a signal of resilient growth for the auto sector in the Indian economy.
Let’s go on to read the reasons for this sudden surge in demand for used bikes during the COVID-19 pandemic:
Purpose of Use
This sudden spike in demand for second-hand bikes spirals from a consumer base who are looking to shift from public transport options like buses and trains to a private option. Given the new social distancing norm where people are trying to stay safe from crowded spaces, there has been a spurt in used two-wheeler buying.
With economic slumps and job losses clouding lives, buyers are more likely to shop in the used vehicle market rather than spend more on a new one.
What gives two-wheeler resellers hope is the prevailing circumstances. Financial institutions are also tightening their belts for loan disbursements, making vehicular loans more expensive. The relatively lower cost of a second-hand bike will work out much better to help buyers migrate from daily public transportation to a personal vehicle.
Buying a second-hand bike for daily commute from a reputed reseller will give you good mileage, require less maintenance, and a free 6-months comprehensive warranty against the vehicle. With the availability of two-wheelers in good condition from a reputed seller, many buyers are choosing used bikes over a brand new ones to save money.
With periodic lockdowns, restrictions on travel, and daily curfews, people are less likely to step outside. Even businesses are encouraging employees to work from home by limiting daily office commute. This reduction in everyday travel has caused a fall in demand for new vehicles.
As states now enter a fully unlocked stage, digital reselling platforms have taken the customer-centric approach during the festival season to drive sales. Incentives like contactless doorstep delivery, assured buyback, extended warranty on the engine are some of the lucrative festive drivers for sales. Buyers are looking to invest in private mobility during the festive season and these seasonal deals have made a massive impact on sales in both rural and semi-urban markets.
A concurrent demand for used bikes despite a pandemic has boomed by more than 20%. More people are looking to downsize from cars to two-wheeler vehicles, given they are cheaper to buy, easier to operate, and maintain. Used bikes also offer more flexibility in terms of mobility and are increasingly popular during COVID-19, where the potential income generation is looking for quick and cheap alternatives for private commutes.
With mass travel systems susceptible to risk, personal transport options are the go-to option. Motorcycle and scooter riders can mitigate the risk of infection by maintaining social distancing, easy parking, and conveniently travelling within government guidelines.
A Shift in Consumer Behaviour
Several months after the outbreak of the Coronavirus pandemic, a drastic change in consumer behaviour has been noted. Consumption patterns, spending habits, and buying attitude is grappling with the on-going crisis. Young millennials who are also part of this change are now focusing on immediate need-fulfillment instead of enhancing their social status.
This post-pandemic trend has seen a predictable shift from high-valued products to value-for-money buys that are driven by factors like job losses and job insecurity. In such a scenario, customers are looking for good quality second-hand bikes at a reasonable price.
Author: Sasidhar Nandigam, Co-founder and CSO, CredR
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.