Pre-owned passenger vehicles market has seen steady recovery and growth in April-July period this year with demand for such vehicles growing by around 25 percent this month as compared to February, says a report.
According to a report by the consumer-to-consumer marketplace for pre-owned items, OLX, the growth of pre-owned vehicles in July was led by sedans followed by SUV and hatchbacks.
In terms of consumer sentiment, 55 percent of respondents plan to use a personal vehicle in the next 6 months and non-metros are key drivers in the demand revival, said OLX's 4th edition of the 'Auto Note'.
"The spurt in demand for pre-owned personal vehicles is not only owing to hygiene concerns but also due to reduced budgets for buying a personal vehicle. As per industry data, the pre-owned car market outnumbers the new car market by 30 percent in volume," the report added.
The report, however, said the preference for public transport, including cabs is on the decline owing to hygiene concerns with 55 percent of respondents intending to commute in a personal car in the future as compared to 48 percent in pre-COVID days.
Stating that the auto industry is on the road to recovery, OLX said 56 percent of respondents planned to buy a car in the next 3-6 months, and 54 percent of these plan to buy a pre-owned car in the same time frame.
"However, their preference is likely to veer towards entry-level models as 72 percent of respondents have reduced their car-buying budget due to COVID-19. For new cars, 39 percent of buyers have a budget under Rs 3 lakh, with another 24 percent having a budget between Rs 4 and Rs 7 lakh," the survey said.
For a pre-owned car, 50 percent of buyers have a budget under Rs 3 lakh while 20 percent have a budget between Rs 4 and Rs 7 lakh, it added.
OLX and OLX CashMyCar had conducted a study with over 3,800 respondents between April-June 2020, and also analyzed indicators from over 4.5 lakh monthly average 'buyers+sellers' on the OLX platform over the same period.
Commenting on the findings, OLX India Vice President Auto Sunny Kataria said, "While COVID-19 has been a black swan event for the automobile industry at large, we are starting to witness signs of improvement, especially in the pre-owned cars industry."
Kataria further said, "changing preferences, evolving customer needs, and an entirely new set of rules for social interactions have given rise to demand in the non-metro cities. Non- metro cities now form a major chunk of buyers and sellers for our platform."
The company said of all the respondents keen to buy a car in non-metro towns, 70 percent of them are interested in pre-owned cars and only 30 percent are interested in a new car, indicating that these places are likely to drive the growth of pre-owned vehicles.
"The narrative flips for metro towns, wherein 70 percent of the respondents are more likely to opt for a new car," it added.