Ford Trucks For Sale

As more major players enter the market, the used car business in India is showing signs of organization through the emergence of dedicated brand stores. However, the market requires a tremendous boost from all fronts. Not only does the government need to safeguard the industry from cheap imports from developed countries, but companies need significant funding to improve their brand presence.

Up until now, India’s used car market has been unable to achieve its full potential, as it has not been able to establish organized trade channels and overcome the basic problem of irregularity in price. Indeed, the market is highly fragmented, with up to 90% of transactions occurring through small independent dealers or private individuals where trade does not get documented.

The decline in consumers’ purchasing power has affected new car sales volumes drastically, and has shifted the tide in favor of the used car industry. Operating within this industry provides several benefits to companies: used cars represent a fresh revenue stream for manufacturers, and act as a medium to increase their brand presence. Furthermore, independent dealers benefit from a more favorable public perception compared to franchisers, particularly in terms of price and familiarity.

The increased inflow of used cars in the market - owing to a short holding period - has prompted manufacturers to allocate equal resources to both their new and used car businesses. Indeed, the number of used cars sold in India annually is almost the same as the number of new cars. Moreover, with the growing number of compact and fuel-efficient cars in the new car market, used cars are no longer limited to the first-time buyers: they are also appealing to people who want to buy a particular make or model but cannot justify the expense or unnecessary extras of a new car.

Cars manufacturers need to increase their penetration in the market by building multi-brand stores, which will allow leasing and rental companies to collate their entire set of de-fleeted vehicles under one roof. Furthermore, the stores will serve as an aftermarket distribution channel, thereby acting as a ‘one-stop-shop’ solution for all automotive needs.

For the used car industry to achieve its projected 50% organization status in the next five years, franchise dealers must improve their branding and propagate the concept of certified pre-owned vehicles. Also, the liberalization of the used car industry in India must be handled with care by the government: there is always the risk of the domestic manufacturing industry suffering as a result of cheap imports from developed countries.