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New Delhi: Amid concerns of personal hygiene and safety against Covid, Indians seem to be buying used cars and motorbikes instead of using shared cabs and public transport.
Customers are also shying away from buying new cars due to economic uncertainty.
In the last couple of months, top sellers of used vehicles, including Maruti Suzuki and Mahindra & Mahindra, and marketplace for used goods, Olx and Quikr, have seen a jump in the demand for second-hand vehicles.
“People are considering buying used cars as they look for cheaper options. People are also opting to not use public transport due to the pandemic. This has led to increased enquiries and interest levels for used cars,” said Shashank Srivastava, executive director, Maruti Suzuki India Ltd.
India’s largest carmaker runs the Maruti Suzuki True Value chain for used cars.
Srivastava added that enquiry levels have gone up by 24 per cent in August and September as compared to the year-ago period.
Mahindra First Choice, the pre-owned car vertical of Mahindra and Mahindra, is also witnessing a similar trend.
“There is an upswing in demand. Sales in the July-September period are up 10-15 per cent as compared to the year-ago period,” said Ashutosh Pandey, managing director and chief executive officer at Mahindra First Choice Wheels.
“The interest expressed on every car that we list is 30 per cent higher now. Customers are also calling. Dealers are also setting up test drives for potential customers though customer walk-ins are seeing a dip,” he said.
Also read: Car sales in China shine as rest of world reels from virus
Pandemic led job losses, infection fear leading spike
The pandemic and the subsequent lockdown adversely impacted economic activity in India. The Indian economy contracted by a record 23.9 per cent in the April-June quarter and is expected to contract in the July-September quarter as well but by a lower magnitude.
Apart from aversion to public transport and cab sharing over fears of Covid, the job losses and pay cuts across many industries has increased risk avoidance among customers leading to a sharp fall in discretionary spending, experts claim.
“The economic slowdown caused by the unprecedented pandemic has resulted in financial restraints which is the primary reason for an upsurge in the interest for budget-friendly options like pre-owned cars,” said Vineet Sehgal, chief marketing officer, Quikr.
“Additionally, with self-awareness on safety measures and given the hygiene concerns, many consumers are leaning towards the idea of owning their own vehicle over public transportation and pre-owned vehicles are easy on the pocket,” he added.
Tanmeet Singh, managing director at Faridabad-based Superwheels, which deals in second hand vehicles at Cars24, said, “The sales of second hand vehicles have gone up since lockdown. Last month, the sales went up by 44 per cent against the sales in January.”
Also read: Govt steps to boost consumer spending to have ‘minimal fiscal impact’, say economists
Demand for cars, bikes zoomed at Quikr, OLX
Both OLX and Quikr are witnessing the same trend since the last few months.
At OLX, the demand for used cars jumped by 133 per cent in August against February whereas at QuikrCars, pre-owned cars ranging around Rs 2 lakh and below, saw 66 per cent increase in interest from buyers.
QuikrCars observed a similar trend in two-wheelers as well. In July, Delhi saw 183 per cent increased interest in pre-owned two-wheelers against January. The most searched brands were Honda Activa, Royal Enfield and Hero Splendor.
Sehgal observed a similar sentiment for pre-owned cars in non-metros like Jaipur, Navi Mumbai, Visakhapatnam, Vijayawada, and Coimbatore as QuikrCars witnessed higher interest among customers as compared to January.
Trend to continue, but supply an issue
The trend is predicted to continue during the upcoming festive season too.
According to an internal analysis by OLX, 61 per cent car buyers are still planning to buy a used car in the next three to six months, which includes the festive season.
“Personal vehicles are gradually becoming an end-to-end mobility solution rather than just a status symbol,” Sehgal said. “We are optimistic about the continued demand for pre-owned vehicles ahead of the festive season this year.”
However, the supply of used cars is much lower than the demand.
“There is not enough supply of used cars. People are holding on to their old cars and not availing the exchange offers for now,” said Srivastava.
Pandey also pointed that supply is a “big issue”. “No one is selling their old cars. Exchanges are lower. Probably, there will be an improvement in supply after the festival season,” he said.
Also read: Industrial production declines by 8% in August
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