Used car market is booming, thanks to BS6

Published On : 06 January 2020
By Tarashekhar Padhy

The prediction of the reaction of the auto-market to the immediate shift to the newer BS6 norms still remains a big question as the auto-industry in India stabilizes. Pre-owned car marketers say the price differential between a BS4 and BS6 vehicle will be sharp enough to make second-hand cars an attractive proposition, ensuring that the industry continues to clock double-digit sales growth throughout 2020.

Discounts hit an all-time high this December as the automakers are becoming desperate to move products, the used car market will have newer models and more variants for prospective buyers to choose from. After reaching a record 15% increase in used cars as compared to last year's 12%.

“A number of BS4 models are now attracting hefty discounts. Given that their BS6 variants will cost Rs 10,000-Rs 50,000 more for petrol variants and Rs 50,000- Rs 1 lakh more for diesel variants, the price differential between a discounted BS4 car now and a BS6 car after April 2020 will be around 20%," said Ashutosh Pandey, CEO, Mahindra First Choice Wheels. This, he said, will make used vehicles a better price-value proposition after April 2020.

The domino effect on pre-owned cars says industry veterans will be two-fold. The pool of used cars seems to keep growing as the newer customers are bombarded with cars lesser than 3-year old. “The impact would be prominent across the category, including hatchbacks, but will be more pronounced in SUVs," said Sunny Kataria, VP (auto), Olx. Used car marketers say the relatively new carpool means that older variants are now being pushed to the tier-3, tier-4 cities.

“The older models are going deeper into hinterland markets, which are served by unorganized players," Pandey said. “In metro markets, which are served by online organized players, consumers are trading up for newer models or pricier categories."