Coronavirus: Used Car Market May See A Boom Post Lockdown

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In order to maintain social distancing many users of public transport are likely consider the option of owning affordable set of wheels.

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Many OEMs like Maruti Suzuki, M&M, VW and Toyota have certified pre-owned car businesses.

Highlights

  • Users of public transport may switch to more private spaces.
  • Consumer will be spending less money for buying used cars.
  • Personal mobility willl help maintain social distancing.

As India waits for the lockdown enforced by the Coronavirus to get over, many are looking ahead and wondering how will our mobility needs change in the times to come. To maintain social distancing people might be wary of using public transport be it metros,buses or trains. Many commuters would also not have enough confidence in using cabs owing to hygiene issues. And a large chunk of the population certainly cannot afford to buy a new car. There's also a lot of talk that in these times of economic uncertainties many would prefer to hold on to their cash rather than spending it on buying a new vehicle.

In such a scenario the most likely solution to the rapidly changing mobility needs in the times of Coronavirus could be used cars. This is possibly the only viable alternative as it solves the dual purpose of maintaining social distancing without spending a fortune. The Indian used car market has many active players, some like Maruti Suzuki, Hyundai Motor India and Volkswagen India who re-sell just their own cars while others like Mahindra First Choice Wheels and Toyota U-trust deal in cars of all brands.

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Used cars sales in India could reach 2.5 times the number of new cars sold in the next 3-4 years. 

Many OEMs are now looking at their used car arms with keen interest as they feel a good chunk of business in the post lockdown days could come from there. According to Ashutosh Pandey, MD & CEO of Mahindra First Choice Wheels in the coming months, used cars is one of the sectors that stands to recover the fastest and has many things going for it. Talking to carandbike he said,"There is a likelihood of customers down-trading and seeking value for money investments, and within auto, used cars probably has the best price-value equation. Several two-wheeler customers might choose to upgrade to a used vehicle too."

He further added,"Other factors such as price differential between BS6 and BS4, limited availability of BS6 vehicles in the next few months, and better financing options, would help used cars." However he also said that these are challenging times for the dealers of used cars, who are small traders and businessman, and have been impacted due to the lockdown. The success of used cars according to him is also dependent on new cars, since a number of customers come in for trade-in of their vehicles.

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Partha Datta, President & MD, FCA, believes that two-wheelers and used car market could see a boom, post COVID-19 lockdown

Speaking on carandbike's web show Freewheeling Partha Datta, President & MD, FCA India said," In the near future there are going to be many people who'll want to switch from a public transport to a more private space. I would expect to see a surge in 2-wheeler and certified used car market. I would expect the 'Selected for you' program in the Jeep portfolio getting a lot more attention that it has in the past."

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It remains to be seen how personal mobility space increases in a country which has among the lowest penetration levels across the world when it comes to ownership of cars. Along with Aviation and Hospitality the Auto Sector has been one of the worst affected in the last one month and some bit of that much needed revival could come in the form of higher sales of pre-owned cars.

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