10% Spike in Used Cars Prices in Festive Season | AU Small Finance Bank
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Demand-supply mismatch could lead to 10% spike in pre-owned car prices in festive season

    Nilesh Wadhwa, Autocar Professional

    The used-car market is booming. With the number of Covid-19 cases fast coming down, increase in the number of vaccinations ND business opening up, customers have started to spend again.

    Going by what Amit Kumar, CEO, OLX Autos says, “For the festive season, wherever I am talking to people the expectation is that of a great festive season. In fact, great could be an understatement there. People are really getting ready to spend big, given the second wave was a sharp downturn people are looking to make it up.”

    Kumar explains, “In order to understand this festive season, we can use references from the previous festive season. We are almost in the same shape of having recovered from a wave, and in the last festive season the demand actually spiked to 160-170%, while the recovery was around 145% when it came to supply.”

    Given the demand-supply constraint in the new car segment, there is expectation of spill over demand coming in the used-car business.

    Kumar says, “From the recovery standpoint, I expect it to be on a similar line where you will have a higher demand and lower supply in the ecosystem during the festive season. This means people will need to pay more as prices will go up. From our previous analysis and top model analysis I think 3-10% is the range we saw in the top models, age, supply. The prices are expected to go up.”

    In fact, he says it’s not just India, but a trend witnessed globally where the prices of used cars are on a rise.