The used car segment in India is expected to leave behind the sales of new cars as more and more organized sector players have been making their debuts in the used car business. The used car segment is now expected to grow at a considerably high pace in the coming years, and surpass the new car market.
In a recent statement given to ET, Jagdish Khattar, CEO of Carnation, a leading used car segment player, said: "Currently the new is to old ratio in India is 1:1.1." He added that the old car market will now proceed to grow much faster than the new, specifically driven by the organized sector. This would bring the ratio closer to 1:2.5-3 for new versus old cars, the norm in developed markets.
The new car segment is expected to register single digit growth in this financial year, as the auto market is witnessing a massive slowdown in its sales due to reducing demand. But, the same is not the case with the used car segment which is forecasted to grow at a comparatively higher pace in coming years.
As per estimates, the used car market sales currently accounts for 18,00,000 units a year. The segment is expected to grow in the range of 20 to 25 percent in coming five years, crossing the 40,00,000 unit mark by year 2015. The organized sector is expected to contribute about 35-40 percent of this growth.
The major organized sector players in the used car segment include Maruti True Value, Mahindra First Choice, Carnation, etc.
