The latest India Blue Book, the industry-first pricing guide for vehicle valuation in India, reports that the institutional market currently accounts for 10 percent of the total volume in terms of supply in the pre-owned car market in India. It adds that the sector is poised to gain even more share with growth in channels of leasing and fleets.
The key drivers of growth for this segment are the increased sale of cars, greater penetration of finance and higher adoption of leasing, subscription and fleet services.
In fact, the share of organised auctions for repossessed vehicles grew by 7 percent between FY2019 and FY2020. Currently, half of the auctions in the country are carried out through the organised route and this share is slated to keep growing as it helps clients get better price realisation and a hassle-free selling experience.
The findings of the India Blue Book are further corroborated by a more recent study undertaken by Volkswagen India and Frost & Sullivan. According to the study, the share of organised players in the pre-owned car market is expected to grow to 45 percent by FY2025 from the current 25 percent levels, driven by new business models, changing customer preferences and belief systems.
Interestingly, the US, UK and India sold more used cars than new cars in 2020, primarily driven by the Covid-19 pandemic which also affected new car sales globally.