Used Car Market in India 2017
India is one of the biggest automobile markets across the globe. With easier finance availability and growing income levels, the middle class is steadily becoming more amenable towards upgrading their two wheelers to cars. Additionally the used car market is steadily becoming more organized and this is a positive aspect fueling higher growth in this segment. The used car market is poised for even higher growth according to industry experts and analysts. Driven by all the aspects mentioned above, the market for used cars has been anticipated to post a compounded annual growth rate (CAGR) of approximately 16% in the entire period between 2013-17.
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Out of these four to five years, 2017 is when the used car market should truly reach its peak according to analysts. 2015 has ended on a positive note for the used car market while 2016 has also been quite rewarding for the industry so far. 2017, however, is when sales and volumes are expected to go into boom-boom mode as per reports. This has further been corroborated by the Booming Used Car Market in India Outlook 2017 report which analyzed the entire used car industry in the country and delineated it into four divisions on the basis of the segments in question, namely mid size, small, luxury cars and SUVs and also on the basis of major cities and key players in the automobile industry.
With an extensive study of the entire market situation, the used car market is expected to garner greater volumes in 2017 since the market drivers are now firmly established, namely growing per capita income, easy availability of financing, greater aspirational desires, entry of organized players and so on. The Outlook report studied used car price patterns and consumer behavior to determine its prediction for 2017. According to industry experts, small cars will continue to dominate the used car market in the country followed by sedans and luxury cars while SUVs should witness moderate demand.
Additionally, industry experts are also anticipating some new tie-ups and partnerships amongst organized players and more automobile brands/companies with regard to setting up established used car chains. Mahindra First Choice and Maruti True Value are currently going neck to neck at the organized end of the spectrum which still contributes just 17% of overall used car sales in the country annually. This means there is ample scope for growth for other players and the number of organized used car companies/brands should grow by the next couple of years in India.
Additionally, measures like the imposition of infracess on new cars and the additional luxury tax of 1% on cars priced above INR 10 lakhs along with policies like the diesel ban in Delhi-NCR and now Kochi and even the odd-even plan will directly or indirectly contribute to greater sales of used cars as per industry experts. With new cars becoming more expensive day by day, the used car industry is set to benefit big-time. 2017 should represent a new growth frontier for the used car market in India.