India’s used car market to reach Rs 2,50,000 crores by 2021

If you are planning to buy a new car, hang on! As it turns out, the used car market in India has grown in leaps and bounds. While the new car market is still in a rough phase, the used car market is gaining stability in the urban India. In 2011, the used car market was worth Rs 38,500 crores. In 5 years, it has grown to Rs 96,000 crores.

Nagendra Palle, MD, Mahindra First Choice Wheels Ltd, believes that the market will further grow to Rs 2,50,000 crores by 2021.
The great Indian used car market is buoyed by various factors, as per Palle. In a discussion with The Economic Times, he said that ownership duration of cars is gradually decreasing. While earlier an individual used to own a car for 7 years, it has gone down to 4 years and would further decrease to 3.5 years in next 5 years.

Moreover, the social acceptability of buying used car is no more a hesitation. The kind of service that Mahindra’s First Choice or Hyundai Promise provides has encouraged many people to buy used car. These pre-owned car dealers check scrutinize the cars thoroughly and most of the time replace and repair anything faulty in old car. This has given rise to a trust that the customers are banking upon.

The emergence of organized sector of used cars has contributed largely to this growth. While back in 2011, this organized sector contributed just 8%, today it has gone up by 12%.

Maruti Suzuki was one of the pioneers in this market and opened its gates in 2001. While earlier the intent was to push their own make through pre-used car sale, now the scenario has changed. Most of these dealers are dealing in multi brands, which are giving customers ample choice.

Banks are also giving loans for pre-owned cars at lucrative interest rates, which is again a big reason behind the growth.