New Delhi: As per OLX Autos, India’s largest pre-owned automotive platform, 61% car buyers plan to buy a pre-owned car this festive season and 56% of car buyers plan to purchase a hatchback car (For ex: Alto, Kwid, Santro, Swift,i20, Polo to name a few). In order to understand the impact of COVID-19 on the consumer behaviour of car buyers during the festive season, OLX conducted a study with 5800 car buyers and sellers during August-October 2020. The insights from the study are discussed in detail below.
Pent up demand and unsold inventory with pre-owned car dealers (As per OLX Autos, pre-owned car dealers have 60% plus unsold inventory due to COVID-19) are expected to shore up the sales of pre-owned cars this festive season (November-January). Owing to the economic uncertainty and rising concerns about personal hygiene, car buyers are increasingly opting for cars as a medium of personal transportation.
Festive season to see a big uptick in pre-owned car sales: 61% of respondents plan to buy a car in the next 3-6 months while 15% expressed interest in selling their existing cars. 62% of these respondents are millennials within the age group of 20-35 indicating that a majority of the pre-owned car sales during the festive season will be driven by this younger generation.
Salaried employees are more likely to buy pre-owned cars: 51% of the respondents were salaried employees while 40% of those surveyed were either self-employed or had their own business. Economic uncertainty with the working population has led to a shift in the preference for pre-owned cars.
Hatchback cars could see brisk sales: 56% of those surveyed said they would prefer to buy a hatchback car such as Alto, Kwid, Santro, Swift, i20, Polo to name a few. 44% of the respondents expressed an interest in buying a larger car. 17% would prefer to buy a sedan(Xcent, Dzire, Etios, City, Verna and Corolla for example) while 11% would prefer to buy an SUV(Ecosport, KUV, Innova, Duster, Creta for example).
Constrained budgets to dictate consumer spends on cars: 63% of respondents surveyed had a budget of only up to Rs 3L for a car while only 30% respondents are willing to spend over Rs 3L to buy a car for their needs.
Pre-owned cars are becoming a familial asset: As India continues to stay indoors, the need to move around at times is indispensable. 67% of the respondents would buy a used car to move around with their families. As the economy gradually unlocks and workplaces resume functioning albeit in a limited capacity, car buyers are shunning shared modes of transportation and opting for personal cars. 22% of respondents would prefer to buy a pre-owned car for their daily office commute.
Sellers of pre-owned cars plan to upgrade this festive season: While the majority of the respondents are keen to buy a used car this festive season, 15% of the respondents also plan to sell their existing cars. Off the same, 53% plan to upgrade their cars or buy another car while 23% plan to do so to meet their financial needs. Interestingly 12% of the respondents are selling their spare car which they no longer use.
Amit Kumar, Head, OLX Autos India, said, “This festive season, celebrations and consumer sentiments will heed on the side of caution as consumer sentiments will remain muted. As India started unlocking, consumers realised that they need to own a personal car to meet their day to day personal transportation needs. This bodes well for the pre-owned car market as pre-owned cars offer the best value realization to these consumers at a time when their incomes have been impacted. Post the unlock, demand for pre-owned cars have shot up 133% while supply is up by 112% on OLX as we head into the festive season. India’s pre-owned car dealers have about 60% of unsold inventory which they will aim to liquidate during the festive season.”
OLX Autos conducted the study with 5800 people in the months of August-October to determine the sentiment of automobile buyers and sellers across India for pre-owned cars in the festive season. The respondents surveyed were across metro and non-metro cities across India and were either planning to buy a car or had brought a car online in the last 3 months.