The used car market which was 4 million units last year is all poised for a robust growth. As per sources in the industry the growth trends in used car industry projects that it would cross 7 million units by FY22.
At present, most leading car companies, both domestic as well as international ones, are into this segment and collectively enjoy around 60 % of the market pie, while the rest is controlled by the unorganized players, Mahindra First Choice Wheels, the pre-owned vehicle's arm of the Mahindra group, claimed in a report Friday.
As many as 4 million used cars were sold in the country in FY19, which was 1.2 times of the new car market that stood at 3.4 million units, it said.
According to a study, dealer footprint has come down due to macroeconomic factors, especially affecting unorganized dealers but organized dealers could grow by 19%.
Govt has rationalized GST in the automobile sector and that has lead to increased investments across the value chain from procurement to retail.
The finance penetration in pre-owned cars stood at 17% with an average disbursement of Rs 3.4 lakh which is good sign for the segment.
According to the study, average monthly volume across segments shows that organized dealers selling 19 cars, and the semi-organized dealers doing 10 cars and the unorganized ones managing four units.
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Image Source: Chevrolet of Naperville