Used Car Sales Witness an Uptick; Dealers Set on a Course of Multi-fold Growth

 

Although automobiles offer effective convenience for the purpose of transportation for consumers, buying a new car is a major financial commitment for consumers. For many of the consumers, this investment denotes a major share of their savings. As a result of this and more such factors, the automakers are observed struggling with dwindling sales and growing inventory. On the other hand, scenarios are quite different for the used car dealers.

The aspect of value for money, easy access to the used cars track records, and thorough quality and performance tests over previous rides are amongst a few factors owing to which consumers are preferring used cars over new ones. Moreover, the rapidly widening price gap between used cars and new automobiles is creating room for growth for the used cars segment. The used car sales are reflecting ascendant growth owing to the increasing demand and rising popularity amongst consumers. Apart from first-time car buyers, used cars are also gaining popularity amongst the ones who are looking to replace their old cars.

Organized vehicle sellers including OLX, Mahindra First Choice Wheels, and Droom have recognized that used car business is not reliant on financing as the new car market. Moreover, automakers are witnessed raising the price of their cars on a timely basis. All these factors are likely to foster the escalating sales of the used cars.

Used Car Dealers Incorporate New Strategies to Maintain Market Position

Used car dealers are making progress on the buyer’s perspective of achieving car ownership at a lower price. The rising used car sales are translating into significant growth opportunities for dealers and businesses involved in providing used cars. Amongst the several strategies implemented by leading used car dealers, advertising strategy is being incorporated by nearly all them.

  • OLX recently collaborated with Germany’s Frontier Car Group (FCG) to introduce its offline used car stores—Cash My Car, which marks FCG’s initial step into the Indian market. With respect to this partnership, both the companies have approved to share technological resources, knowledge, and expertise to establish and operate Cash My Car stores across the nation.
  • Truebil, a leading name in the used car sector is currently relishing a revenue of Rs. 30 crores every month owing to the progress held by the market. Backed by continual business growth, the company recently closed an Rs. 100 crore funding raised from its existing and other Japanese investors. The company plans to utilize these funds for introducing new geographies and for further penetration into the existing market. Ahead of this, the company aims to achieve an Rs. 1000 crore annual revenue with the expansion in leading cities in India including Chennai, while the target for next to next year is a massive Rs. 3,000-4,000 crore revenue.
  • CarDekho, India’s used car giant has recently signed an MoU for pre-owned trade-in partnership with Citroen. With respect to this agreement, Citroen would develop a seamless digital experience for its used car customers. Citroen also plans to produce its C5 Aircross SUV in India followed by its launch in other markets.
  • Group PSA, a French vehicle manufacturer recently launched its revolutionary multi-brand used car label—Spoticar with which the company aims to establish a stress-free buying experience for consumers where it is through the dealership from bricks and mortar stores or online.
  • BeliMobilGue, an Indonesian used car sales platform recently raised a $10 million from FCG and new investors including Tunas Toyota, Toyota’s authorized dealership for cars in Indonesia, to be used for its sales platform with an aim to dominate the automotive sector in Indonesia.

How Automakers Respond to the Propelling Demand for Used Cars?

The expansion of the used car market has raised major concerns for the automakers that provide new cars. Various initiatives are being incorporated by automakers to tackle this issue. BMW, Nissan, Volkswagen, and others recently collaborated to lobby governments for steps that would minimize the imports of automobiles that have made sub-Saharan Africa very difficult terrain, thereby allowing local manufacturing to flourish. Although automakers are wary of the robust sales exhibited by the used car segment, various automobile companies are seeking opportunities amidst the continual growth of the pre-owned car segment.

Hyundai, a leading automaker in Korea, for instance, recently introduced the Hyundai Venue which is another addition to the overfed subcompact crossover segment. With this new launch, the company aims to target a different niche unlike other competitors as it is likely to position its new vehicle Venue as an ultra-value proposition with an aim to entice used car buyers.