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

The 2022 edition of the Indian Blue Book (IBB) is one of the most comprehensive reports on the used car ecosystem in India. The used car market is growing at a good rate, with 4.4 million used cars sold in FY 2022 and is on track to double the volumes by FY2027. Along with the performance of the used car market in India, the report also outlined the issues plaguing the sector, that need to be looked into so that the performance of the used car segment grows uninhibited.

Also Read: Women Constitute Up To 15 Per Cent Of Used Car Buyers In India

Unsteady Supply Of Cars & Increasing Channels

Most used car transactions are still taken place in the unorganised used car market segment, which is approximately 45 per cent of total transactions. This is turn, results in uncertainty in the quality of the inventory, no quality checks, inspection report and availability of vehicle service history. Re-assurance of quality for customers becomes an issue.

Also Read: Used Car Market To Grow To 8 Million Units By FY 2027

Lack of Skilled Labour

Industry expansion and demand for used cars have increased the requirement for new trained labour for inspections, sales, maintenance, and repairs, resulting in overall sector upskilling.

Also Read: Hatchbacks Lead The Sales For Used Cars In India

Lack of Set Standards

The other big impediment in the growth of used car market in India is the lack of set standards. The unorganised sector has a share of 45 per cent in overall transactions and consumer-to-consumer transactions having 35 per cent market share. This means that there are no set standards for car inspection and the value of the car is determined in an ad-hoc manner, with little to no clarity. In most cases, the customer is robbed of the satisfaction of getting a fully certified car, with detailed inspection done.

With used car market becoming organised, the headwinds dampening the growth of used car market will tend to recede as well.