State of the Market
With 3 million+ acclimated car sales, India’s acclimated car bazaar has outpaced the new car bazaar which could alone administer about 2.5 actor units. This puts the new car to acclimated car sales arrangement at about 1:1.3. While this arrangement seems adequately optimistic for the industry, it’s still way abaft the Western levels of 1:3 in the UK and US, and about 1:2.2 in Germany and added Western European economies.
However, the bazaar has been accumulation a admixture anniversary advance amount of 15-18% in the endure 5 years. The CAGR is accepted to shoot up to about 22-25% by 2018. Experts accept called the arrangement of new cars to acclimated cars sales to become 1:2 by 2017-18. Sales of acclimated cars are, therefore, acceptable to added than bifold in the next 5 years.
A analysis by CRISIL begin that amid 2008 and 2013, sales of acclimated cars angled to 2.6 actor units arch to a fourfold access in the admeasurement of the bazaar to Rs. 520 billion. The address added estimated the sales of acclimated cars to ability about 8 actor by 2018 which will put the appraisal of the acclimated car bazaar at Rs. 1.5 trillion. Whereas the sales of new cars are accepted to ability about 4.2 actor units.
The bazaar is fabricated up of competitors with three audible business models. The transaction parties cover franchised and absolute dealers who yield on the banking accident of affairs and affairs cars. The transaction facilitators – online sales platforms and online matchmakers – depend on fees from enabling sales transactions. The advice providers action insights into appraisement trends and data of the action of specific cars.
Used cars are awash to end barter via these three channels. A majority of the affairs are managed by the clandestine sellers themselves. The additional above approach of transaction includes franchised dealers. Absolute dealers and added online sales belvedere accomplish up for the blow of the absolute sales.
Though the bazaar is still heavily bedeviled by the alternate players, the allotment of organized players has been on the rise. Growing at a admixture anniversary advance amount of 40%, organized articulation now accounts for about 18% of the absolute bazaar and is accepted to acceleration to about 25% by 2017-18.
Key Bazaar Trends:
- Changing Demand
A majority of the absolute auto sales in India abide of 2 wheelers. A part of this population, abounding humans are searching to advancement from a 2 wheeler to a 4 wheeler. Added there is a growing bread-and-butter and amusing charge a part of buyers in the age accumulation 25-40 to own a car. These aboriginal time buyers and 2 wheeler owners searching to advancement mainly accomplish up for the appeal in the acclimated car market. With the added availability in the amount of acclimated cars accessible and the accretion attendance of organized players in the market, added buyers are acceptable to access the bazaar for acclimated cars. Car acceptance and car history reports, assurance and afterwards sales abutment are traveling to arch the beforehand absolute advice aberration and are acceptable to be the key drivers abaft the demand.
- Changing supply
Average backup cycles are falling. According to a survey, in 2006-07, buyers captivated assimilate their new cars for as connected as 54 months (4.5 years). This fell to 48 months (4 years) in 2011-12 and is accepted to abatement down to 42 months (3.5 years) in 2016-17. This access in the abundance of backup will acquiesce for an access in the accumulation of acclimated cars as old as 3-4 years. Also, with improvements in the car superior (resulting in a best activity span), appeal for acclimated cars is assertive to access in the abreast future.
- More online transactions
Buyers of acclimated cars are boring but absolutely axis to the Internet to analysis and buy cars. Consumers are accession at dealerships armed with added advice about specific cars and a bigger compassionate of bazaar prices, and they are visiting beneath dealers afore affairs their called car. The rapidly accretion use of adaptable accessories is advocacy this trend: Added than 20 percent of all Web searches accompanying to “used-cars” are now conducted on these devices. Traditional brick-and-mortar dealers will be affected to chase this admirers online, conceivably alms acclimated cars through online marketplaces that accommodate referrals to dealers with bounden offers – a archetypal already accessible in the United States.
- Increased transparency
The availability of advice on the Internet has already added the ability of the acclimated car bazaar significantly, accouterment greater accuracy into prices and even the action of specific acclimated cars. Growing use of online transaction platforms will alone addition bazaar ability further; indeed, agenda intermediaries accept the befalling to appearance the anatomy of the industry as their access grows, accentuating aggressive pressures and absolute the alterity amid the a lot of able buyers and sellers and the laggards.
- Growing accent of convenience
With the appearance of added internet assimilation and the connected disbelief in the authority of claims of Absolute dealers, added and added clandestine sellers are searching for alternative- fast and hassle-free means to advertise their acclimated cars. This trend will accept a absolute appulse on the acclimated car bazaar as clandestine owners about-face to newer online business models to advertise their cars. Alms fast, affirmed transactions, online affairs platforms are decidedly acceptable to benefit.
- Growing bazaar penetration
The car buying amount in India stands 18 per thousand people. At 2 per 100 people, this is one of the affliction in the world. With the accretion GDP per capita and an access in the allotment of affluent households, the buying amount is acceptable to change for better. This presents an absurd befalling for OEMs to aggrandize their assembly in India. In US, buying ante are as top as 95% and about 60-70% in Western Europe.
| automobiles history channel