Whereas the pre-owned automobile section will see continued progress, challenges like finance availability for patrons will have to be addressed.
The used automobile market, which has been handsomely outpacing the brand new automobile market’s progress for a number of years now, is within the midst of its personal transformation, with the sector now getting formalised. And as an growing variety of automobile homeowners substitute their used automobiles, the Indian used automobile market will develop by 15 % within the coming years.
- Used automobiles to develop at a fee of 15 % within the subsequent decade
- Share of financing for used automobiles to develop in three to 5 years
In keeping with OLX Autos, the used automobile market is ready to the touch 7 million items by FY26. That’s virtually 2.5 million items greater than the brand new passenger car market, which is estimated to develop to 4.5 million items by then. In the course of the not too long ago concluded jury spherical of the OLX Autocar India Pre-Owned Automobile Awards 2023, the jury members had some attention-grabbing insights in the marketplace. The panel included Amit Kumar, CEO of OLX Group India; Hemal Thakkar, director, Transport, Logistics and Mobility, CRISIL Market Intelligence and Analytics; and Ravi Bhatia, president and director of Jato Dynamics India.
Kumar stated given the enhancing street infrastructure and rising mobility wants, the demand for used automobiles will proceed to develop at a fee of 15 % within the coming decade. Moreover, with automobiles being seen as a standing image and it being a liquid asset, the demand for it would proceed. Thakkar additionally felt that increased progress might be seen within the premium used automobile section as aspirations rise and as premium car carpark will increase.
Financing for used automobiles
Whereas finance penetration for used automobiles is simply at 25 % versus 75-80 % within the used automobile section, it’s rising. Kumar expects the proportion of used automobiles getting financed to develop to 40 % within the subsequent three to 5 years.
Nonetheless, there are challenges right here, particularly with respect to the variety of eligible clients. Provided that a big a part of the market stays unorganised, there’s a vital money aspect concerned within the consumer-to-consumer commerce. And whereas even the penetration of financing will develop, the speed of curiosity to finance used automobiles remains to be increased and stricter screening of consumers could pose some headwinds.
Moreover, as Bhatia put it, the variety of folks with sufficient “CIBIL rating to get the credit score has shrunk from 28 crore to 19 crore” and that interprets to fewer patrons getting their automobiles financed. He additionally added that “except monetary establishments present some dedication and dedication to develop this market, the used automobile market will witness slower progress.”
OLX Pre-owned Automobile Awards 2023
The second version of the Pre-Owned Automobile Awards is hosted by OLX Autos in partnership with Autocar India and might be held in December 2022. The concept behind the awards is to supply shoppers with related data and professional suggestions to assist them make well-informed selections when making a used automobile buy. Learn extra on the awards and the voting course of right here.