The recent order by Supreme Court on barring the sale of BS IV vehicles from April 1, 2020 is going to pose a challenge to both the used car platforms as well as buyers as under the advanced BS VI emission standard, all the diesel cars will see a sharp increase in price. Regardless of the challenges, the growth of used car marketplaces is driving the culture of pre-owned cars in India. In fact, by 2020, the used car sales numbers are expected to touch 7 million units a year with a market size worth $ 30 billion, says Shubh Bansal.
We belong to a country where owning a car is considered as a subtle testimony to success. The different price brackets and the option of purchasing brand new as well as pre-loved cars, makes them an accessible luxury for many. But, unlike buying a brand new car, purchasing second-hand cars usually comes with a lot of apprehension among Indian consumers. This is because even though the market is brimming with choices, the used car segment is somewhat unorganised where 70 per cent of used car purchases are still made through local dealers or personal contacts.
Traditionally, the unregulated dealerships failed to make the entire purchasing process transparent, and many ended up paying more money without identifying the shortcomings in the pre-owned car. Paired with the inconvenience that followed along with the huge gap in the quality required, many aspirational customers refrained from making used-car purchases.
Just when the concept was about to lose its popularity, however, new-age online used car portals started making their way to streamline this entire segment. These portals are changing the Indian used car market in a major way by aggregating and bringing all the information about used cars including research, price quotes and comparison under one roof.
Meanwhile, considering the rapid investments being made by the Indian government towards the development of good road infrastructure, the condition of cars isn’t deteriorating as quickly as it used to, a decade ago, further propelling smart buyers to opt for used cars. All these factors are encouraging more and more Indian consumers to buy cars, primarily pre-owned ones to get maximum return on their investment.
The biggest growth driver of the used luxury car segment in India, however, is the increasing purchasing power of the country’s service class that has increased manifold in the last two decades. Moreover, considering the fast-paced depreciating value of the luxury cars, the owners are always in a rush to upgrade by selling the used models. This makes a sparingly used Audi A4 or a BMW as affordable as a top-end Honda City or a Hyundai Creta.
In fact, many consumers prefer visiting an offline store and physically inspecting the car before making purchases. For the online used car marketplaces, the catch lies in offering online discovery of a car on their platforms with full in-depth details about the condition followed by its offline availability for the final deal, integrated with smooth and hassle-free post-sales services. Unfortunately, the recent order by Supreme Court on barring the sale of Bharat Stage IV vehicles from April 1, 2020 is further going to add up to the challenges of both the used car platforms as well as buyers as under the advanced Bharat Stage VI emission standard, all the diesel cars will see a sharp increase in price. This may keep the used-car buyers away from making any purchases for some time at least.