The used car industry is on the rise in India, and despite the pandemic that affected the automotive industry, the used car market has seen steady growth. The used luxury car market, in fact, has gone to the extent of facing demand-supply imbalance. To know the used car industry better, especially the luxury car market segment, Express Mobility reached out to Jatin Ahuja, the MD and Founder of Big Boy Toyz.
Big Boy Toyz deals with premium, high-end luxury vehicles in the used car industry. Discussing how the pandemic has affected sales and if used premium cars have become more affordable in India, Jatin Ahuja had the following to say.
How has the pre-owned car segment affected the new car sales in India?
The pre-owned car segment has been witnessing exponential growth owing to COVID-19. The pandemic has accelerated the second-hand car business to the point of supply-demand imbalance. The high-quality cars are available at an affordable rate, and the inclination to get the imported cars have changed the customer focus on the pre-owned car segment. The used cars market is predicted to register a CAGR of 15% FY 2021-2026.
Have luxury cars become more affordable with the used car segment, and if so, by how much?
Yes absolutely! The purchasing power has increased with the help of government regulations and a systematic preowned market. The preloved cars have a high depreciation rate and are as good as new when sold. Additionally, the decrease in the GST on used cars from 28 to 18% for big cars and 12% for small cars, is another driver of affordability. Additionally, pre-owned cars offer a wide variety of brands to choose from.
Have EVs picked up sales in the used car industry?
EVs are gradually gaining popularity, and sales are picking up. When it comes to electric vehicles, luxury cars are not available as EVs as of now. Hybrid models are something that is picking up in this segment, and we take pride in being the topmost provider of hybrid models all over India.
What are some of the technologies used in the used car industry?
The used car market is seeing tech-driven growth owing to digital adoption. We at BBT and are currently leveraging technology for auctions. Post pandemic, car owners are setting up an online buying experience for their customers through apps. Technology has helped customers gather information about luxury cars in just a few clicks. We also have an app for contactless sales, speedy selling etc., intending to make information easily available to our customers.
What are some of the challenges when dealing with used cars or in the industry?
The biggest challenge the industry is facing is the imbalance in the supply-demand ratio. There is a huge surge in demand for pre-owned luxury cars, but we cannot cater to them as not many cars pass our stringent quality checks. We have 121 checkpoints to procure a car, and we take in the car only if it meets all the quality guidelines that we have in place. That’s why procurement has become challenging to us.
How has the COVID situation in the last year affected pre-owned car sales?
Despite the economic slowdown, pre-owned car sales saw an upward trajectory growth last year amid the COVID situation. The pandemic has brought in a paradigm shift in the consumer focus. People planning to buy new luxury cars have shifted to the pre-owned luxury segment amid COVID-19, which is why our segment has grown amid COVID-19. The pre-owned industry in India reached 3.8 million units in FY2021, making it 1.5 times larger than the 2.6 million units new-vehicle market. The growth is said to reach expected to reach USD 50 billion by 2026.
Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.