IBB Report 2022: Three Major Evolving Trends In India's Used Car Market

The fifth edition of the Indian Blue Book (IBB) for Financial Year 2021-22 has been released. The annual used car industry report, which is presented by car&bike and Volkswagen's Das WeltAuto, shared critical insights about the Indian used car market and its trends. The IBB report highlights the fact that while there are several business themes at work globally, at least three are linked with the majority of the organised used vehicle platforms in India. And the three major evolving trends are - Transaction, Multiple Supply Channels, and lastly, Quality & Aftersales.

Also Read: Exclusive: India's Used Car Industry Will Grow Nearly 13% By FY2027

Transaction

Here we are mainly talking about platforms selling directly to consumers. This includes everything from organised platforms (OEM dealers, independent dealerships, corporate-owned franchisees) and cars sold by unorganised dealers/brokers. And a big change that has come in this area is the Phygital approach. Brands are investing in tech-enabled platforms that combine online and offline buying experiences, which are powered by personalisation and content-led information services, thus allowing buyers and auto enthusiasts to buy a used vehicle on their one terms and from wherever they want.

The IBB report says the need for personal touch and feel remains high among first-time buyers.

So, Potential buyers can reserve, test drive, finance, and purchase a certified used car through used car digital platforms. But, on the physical front, the focus is on providing buyers with multi-brand used cars across offline dealerships, along with customer experience and value-added services. The IBB report says the need for personal touch and feel remains high among first-time buyers, so, while the phygital approach is preferred and could remain important even as the purchase experience would largely remain dealer driven.

Also Read: Issues Plaguing The Used Car Market In India – IBB Report 2022

Multiple Supply Channels

Supply is further secured through repossessions and auctioning of vehicles by banks & insurance companies.

The second trend in the used car industry is the exploration of multiple supply channels to secure vehicles to match the high demand received by both, the organised and unorganised markets.

And this happens in three steps:

1. Tapping into the aggregation of yards where vehicles are parked pan-India and purchasing certified quality vehicles directly from FIs and leasing cos.
2. Leveraging the pan India network of trained vehicle evaluators, who assist banks, and NBFCs with AI-based algorithms to arrive at the Quality Score
3. Supply is further secured through repossessions and auctioning of vehicles by banks & insurance companies.

Also Read: Exclusive: 15 Per Cent Of Used Car Buyers Are Women, Says IBB Report FY2021-22

Quality & After-Sales

Buyers are increasingly looking to purchase vehicles with financing at a low cost when coupled with warranties.

Car ownership is one of the most involved decisions that an individual takes in his or her lifetime, and today, a used car buyer is looking for more than a functional car with decent mileage on it. Buyers are increasingly looking to purchase vehicles with financing at a low cost when coupled with warranties. In addition to that, organised used car platforms also provide services such as transaction listings for dealerships, which, in turn, help rotate dealer stocks faster and bring about growth. While these services come at a premium, they are justified with the after-sales support, and the hassle of vetting quality vehicles.