There are 30 million four-wheeled passenger vehicles running on Indian roads, according to research by the online pre-owned car marketplace Cars24. This number doesn’t include Uber, Ola or taxis, but is only the white number plate data (taxis have yellow number plate).
This data has been collated by Cars24 from the Society of Indian Automobile Manufacturers, which shares monthly new car sales. “We went back 15 years (the average car registration life in India), added it all up, and arrived at this number, which is a little over 30 million units,” Ruchit Agarwal, co-founder & CFO, Cars24, told FE. “There would be a discrepancy of a million or two units here and there, but broadly that many cars are currently running on Indian roads.”
Of these 30 million, around 4.5 million got sold in the used-car market in FY23, according to data from the Indian Blue Book – the used-car vehicle valuation website – and less than a million in the organised market.
“This points to two things,” Agarwal said. “One, the average holding period of a car in India is 6-7 years (30 million divided by 4.5 million). Two, organised players like us have a lot of ground to cover in the used-car space.”
The organised used-car market is comprised of OEMs like Maruti Suzuki True Value, Mahindra First Choice, Hyundai Promise and Honda Auto Terrace, and auto-tech players such as Cars24, OLX India and Spinny.
“Right now, a lot of used-car business is unorganised – as most sales happen customer-to-customer or via roadside dealers, and that data isn’t usually recorded – but buyers are shifting to the organised space thanks to easy availability of finance and warranty, and the transparency, they can provide,” Agarwal said.
Top carmakers
According to Agarwal, the used-car market is throwing up interesting data points. “The market share that a carmaker had 6-7 years ago in the new-car space, is its current share in used cars, and the car body type that was popular 6-7 years ago in the new-car space, is currently popular in used cars,” he said.
For example, in used cars, Maruti Suzuki and Hyundai are the most popular brands today. But these two are followed by Honda, Renault and Ford, instead of current big players such as Tata, Mahindra and Kia. The reason is that Honda, Renault and Ford sold a lot of new cars 6-7 years ago and that inventory is in the market. “Even though Ford has stopped producing cars in India, it continues to be a top choice in used cars,” Agarwal said. “Kia is big today, but there aren’t enough Kia cars in the used-car market as these are still with original buyers.”
As far as body type is concerned, while SUVs have taken over the market, in used cars hatchbacks rule. “SUVs will become popular in the used-car market 2025-26 onwards, when there will be enough supply. Most SUVs, especially the popular sub-4 metres ones, were launched during 2016-20, and a majority of them are still with original buyers,” he said. “Hatchbacks such as the Swift, Baleno, Alto, WagonR and Celerio are the most popular used-car models today.”
POINTERS
— The average holding period of a car in India is 6-7 years
— While SUVs have taken over new-car market, hatchbacks rule the used-car space
— Even though Ford has stopped producing cars in India, it continues to be a top choice in used cars
— Around 4.5 million cars got sold in the used-car market in FY23