Used car market expected to mark a two-fold growth in the current fiscal year
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In the market where growth rate has remained sluggish consecutively for several months owing to dipping demand for new cars, the used car market is anticipated to record drastic growth rate this fiscal year. The market demand in India comprises of an equivalent contribution for the used cars and the growth of the used car market is estimated to be 10 to 11 percent as against the growth of 3 to 4 percent expected in the new car market this year.
Mr. Rajeev Dubey, President of Group HR, the Aftermarket Sector & Corporate Services, Mahindra & Mahindra, commented, "Typically, we have seen a 5-7 % differential between the sales growth in the used and new car markets. This year, the organized sector in the used car business should grow about 15-17 %."
As per Mr. Dubey, the used car market has immense potential for growth even in adverse economic situations as in India, the ratio of sales between new and old cars still totals at 1:1. With gradual economic growth and new model launches, the masses will opt for newer models at a faster pace thereby, impacting the ratio in favour of the used car market.
The basic constraints hindering the growth of this sector in India are the financing difficulties and the high interest rates. Moreover, only 11 percent of the sector is organised comprising of automakers aiming to plunge up sales of new cars through exchange offers.
Mr. Dubey also affirmed that Mahindra & Mahindra is gearing up to put in place aggressive strategies with the aim of selling 45,000 vehicles this year marking a planned growth of 35 percent.
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