Amidst the production shortage of automobiles in India due to the global chip shortage, second-hand car dealers have seen high demand with vehicles now being sold at a 20-25 per cent premium.
As automakers struggle with global semiconductor shortage, the pre-owned car market has seen a shift from people who do not want to wait longer period for a vehicle. Retail sales of new cars saw a decline in October and leading automobile companies have seen a dip in production output.
“Post-pandemic, we have seen a growth in the demand for the pre-owned cars and it’s at an all-time high as they are more affordable. We also witness an inclination towards hatchbacks and SUVs specifically. Now that the auto industry is facing the chip shortage crisis, the new car production is seeing a significant decline in the past few months. With the ongoing festive season and decline in production of new cars, the demand for pre-owned cars is expected to witness a significant uptick in the next few months,” says Kunal Mundra, CEO, Cars India, CARS24.
On bookings, car buyers have a waiting period of four to six months which has led to a shift towards low-age cars. Many second-hand car dealers in Mumbai shared that they have seen a rise of 20-25 per cent in prices of low-age cars. Coupled with the long waiting period, higher fuel costs have brought more enquiries for CNG passenger vehicles which are being sold at a premium of nearly 15-20 percent. This demand is expected to grow in the coming months.
Niraj Singh, founder & CEO of the used car marketplace Spinny says, “Not just the waiting period but people have begun to choose personal mobility solutions and the pre-owned car market has shown realistic choices in the midst of pandemic and other factors. Most of these customers are in the age group of 25 to 35 years, salaried professionals who are buying their very first cars, relying on car loans and other financing options. Most of these customers are preferring to buy compact yet feature-loaded SUVs, over sedans.”
The platform aims to sell over 6,300 cars in October and November 2021, as against 2,500 cars sold during the same period last year, marking a growth rate of 150 per cent.
An otherwise buzzing festive season for carmakers has seen tepid sales. Due to supply constraints, Maruti Suzuki witnessed 24 per cent decline in overall sales in the month of October, while Hyundai too registered a double-digit fall in sales in the same month.
