Covid Impacting Supply but Expect Stabilisation in 2021 By Prafull Bonde| AU Small Finance Bank
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COVID-19 impacting supply but expect stabilisation in January-February 2021

    By Sumana Sarkar, Autocar Professional
    Prafull Bonde has been dabbling with cars since his college days. Such is his love for cars that he kicked off his own business in 1993. Since then, Bonde’s Popular Cars has transformed into one of the trusted names in the used car space in Nashik, Maharashtra. Bonde is also associated with the All India Car Dealers Association and is also its Maharashtra State Vice-President.
    Bonde’s Popular Cars is known for its extensive range and stock of used cars. At any given time, the store has an average stock of over 50 cars to ensure the buyer is able to narrow down on a choice of his/her own.

    How did you start the business and can you elaborate on your experience?

    I have been interested in cars since my college days and started this business since 1993. From 1996, I started expanding and the association with AU Bank gave impetus to my used car business. The going has been good since then.

    What was the sales scenario this Diwali?

    The Covid scare impacted shared mobility and in some ways that has helped demand for used cars but work from home also neutralises the demand for cars to some extent. So overall, there is a 25-30 percent drop in sales from last Diwali, mostly in super premium cars. The smaller cars are getting higher rates due to shortage of supply. The sale of small cars and the ones running on diesel are getting higher rates.

    Was there a perceptible spike in demand compared to previous festive seasons?

    Demand for used cars is only from those consumers who have fixed income source or adequate savings. The financial uncertainty is playing havoc. Moreover, sales are directly proportional to availability and needless to mention that the lower supply at the moment is also impacting sales. In the current scenario, we can’t even procure cars from other states as road tax is very high and there are travel restrictions.

    How has the pandemic impacted the used car demand?

    There is no doubt that the fear about spread of Covid is impacting demand. Given the increased need for personal mobility, our stock reduced to zero after the lockdown was lifted and sales have reached pre-Covid levels. However, now non-availability of stock is a major concern. Overall business dynamics are impacted earlier. Pre-Covid, we used to sell 30-40 cars in a month; now post-Covid, it is barely 10-15 cars a month

    How has the introduction of BS VI impacted demand for used car demand/supply

    BS VI cars are priced higher, so used cars demand has increased but lower supply of used cars is playing havoc on overall numbers.

    Has the ease of financing affected the used car sales momentum?

    Improvement in getting financial loans for used cars has helped overall demand to a large extent.

    How is the current supply situation in the pre-owned car market?

    We expect some improvement in the supply of used cars, going forward. I expect supply to stabilise in January-February but as of now sale of old cars is very limited. So there is supply crunch as of now. In areas that are prone to flooding, the used car supply was lower due to cars affected by the flooding last monsoon.

    What type of digitisation initiatives are trending in the used car segment?

    There is no significant impact of digitisation. Though customer enquiries have increased significantly as a result of digitisation, that does not necessarily convert to buyers always; most turnover happens locally.

    What are the type of models/segments that are seeing maximum traction in used car segment

    You see maximum demand for five-seater vehicles. Hatchbacks and mid-sized sedans are also seeing brisk demand but the premium segment and tourist taxis not seeing much demand.

    How many point checks does a used car typically go through at your dealership?

    We follow a proper sanitisation process for all our cars. We undertake a 110-point checklist for a comprehensive certification. We also offer warranty for cars that we have procured personally. However, we don’t offer any warranty for cars dealt with via a third party.

    What is the average age of a used car at your dealership?

    We deal in cars across a wide range. But on an average, loan availability is easier for cars that are 5-10 years old. That’s the preferred range.

    What is the amount of paperwork involved and has the online process reduced this?

    Covid has impacted the pace of processing but overall online process has streamlined the process.
    Disclaimer: The opinions expressed in this article do not purport to reflect the views or opinions of AU Bank or its employees.