Used car market expanding share in Indian auto market; offers huge opportunities to car makers
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The market for second hand cars remains active even though the new cars are hardly approached by buyers. Used car sellers like Maruti True Value and Mahindra First Choice are looking for a high double-digit growth in 2012, even as their new cars continue to register low or average sales figures. The new car business gets affected whenever high rates of interest are applied and as a result buyers get inclined towards used cars.
Managing Executive Officer, Marketing and Sales, Maruti Suzuki India Limited, Mayank Pareek, said, “Our used car business under Maruti True Value is the only positive sign in an otherwise dull market.”
He further said that in 2011 the company sold 2,31,000 models under its True Value brand and is expecting a surge of 20 per cent in 2012. If True Value had been an independent entity, it would be ranked as the fourth largest car company of India. Similar is the case with the largest multi-branded used car firm in the country, Mahindra First Choice Wheels. In 2011, the company reported sales of 34,000 units and is looking forward to expand its business by a third in 2012.
There are huge opportunities for the car manufacturers in the used-cars segment, which has grown over the last few years and has emerged as large as the new car market in India, with almost 25 lacs of used cars being sold every year. However, it is still far away from the status enjoyed by the developed markets like US and Europe where for every new car three used cars are sold.
President, HR and after market, and Member of Executive board, Mahindra & Mahindra, Rajeev Dubey, said, “I would assume that as the industry evolves, the size of this segment will only go up.” He further added, “Currently the used car segment in India is as big as the new car segment. As organised players proliferate and expand, this will increase to maybe double or more the size of new cars. That is bound to happen.”
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