In-depth Study of Used Vehicles for the Year 2020.
Updated: Mar 15
USED VEHICLE INDUSTRY
The used vehicles market Industry in India is on a fast-track growth pace.
The two-wheeler and cars constitute the largest share in this. These two are garnering great attention and also the larger pie of investors are eyeing this segment.
We are seeing investors queuing up to have a share in the fast-growing used vehicles market pie.
The used car market growing at a CAGR of about 15.12%, which is staggering fast. The volumes are estimated to be more than 4 Million for FY 2018 alone. This is a big volume already. And the fact that it's growing at a rapid pace, which is even faster than the new car industry, is the obvious reason for it to garner so much attention.
Not so long ago, we used to see a 1:1 or 1:1.2 ratio between new and used cars. Now, we have crossed the 1:1.3 and continue to grow fast.
With the reduction in the average holding time of the asset. And ever-changing preferences in the car segment, the demand for buying and selling of used cars is growing strong.
We see more and more buyers move towards the organized sector. Even though it's about 20% still, but the customers are preferring a new car buying experience even when they buy a used car.
We are the largest producer and manufacturers of two-wheelers. The closest competition to us is China. Two-wheelers have been at the heart of Indian consumers. One always starts off on the roads with a two-wheeler and then gradually graduates to a car.
The demand for two-wheelers has seen a health rise from FY 2013 to the present. Along with this, we have seen a rise in the demand for used two-wheelers also.
Of course, the used two-wheeler sector is dominated by the unorganized sector. The unorganized sector primarily constitutes individual sellers, local dealers/mechanics and small dealerships. But they rule the largest share of the used two-wheeler market.
The majority of the transactions are offline and C2C in nature.
The Indian two-wheeler market is dominated by motorcycles. This is primarily constituted to the Male riders who prefer traveling a long distance and prefer motorbikes to scooters. They attribute it to comfort, mileage, and power.
Let’s look at some of the most interesting trends of the year 2020 with regards to this industry.
The data has been got from droom, based on the customer insights on their website.
Hence, the insights we see can also be attributed to more of the organized sector trends of the used vehicle sales.
TOP 10 CITIES
Here is a look at the top 10 cities which have the highest volumes of used car/bike volumes.
Delhi is a market where we have the highest new car sales, it also rules the used-vehicle space.
The other cities continue to be as expected. however for few surprises in rankings with Jaipur and Hissar coming up.
TOP EMERGING CITIES
The growth of the future comes from the rural markets. The emerging trend also shows the same. We have the top 10 emerging cities which are primarily the Tier 2 and 3 cities, that are catching up aggressively.
WHICH AUTOMOBILE ASSETS ARE SOLD IN THE USED VEHICLE CATEGORY
Clearly, the cars constitute the largest chunk of the sales 87% of the organized sector constitutes these cars.
The two-wheeler shares the rest of the industry.
HOW LONG DO PEOPLE HOLD ON TO THEIR AUTO ASSETS
It is clearly visible that 5 years seem to be the average.
People hold onto cars for an average of about 5 and a half years. Whereas bikes stretch even more. However, the superbikes category has the least period of about 50 months.
WHICH ARE THE TOP SELLING CARS IN THIS INDUSTRY:
Maruti has 5 cars in the top 10
Toyota has three: The old Innova, New Innova, and Fortuner.
WHICH ARE THE TOP SELLING BIKES IN THIS INDUSTRY:
Royal Enfield has two versions
The others are the regular top-selling new bikes volume.
Top 5 OEMs of the Used car space
Maruti continues to rule the number 1 spot followed by Hyundai.
However, the market demand for Toyota and Honda throws the rest out of track and the podium as well.
The Colours Game
White rules the hearts in the new and used car space.
The second position was taken by silver here as well.
Grey, Black, and Red have single-digit contributions in this part of the industry.
Cars by Transmission Type
Manual still holds the lion's share.
However one has to be observant of the fact that the automatic is growing and growing at a rapid pace. The fact that the demand in the used car segment has reached a peak of 37% is a testimony to the fact that this is the transmission type of the future.
Diesel rules the market here. People prefer diesel as the more important mode of fuel.
The CNG or Dual Fuel is at a minuscule 1%
Data Source: Droom