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‘Used car biz may more than double in 5 years’

India’s market for used cars is expected to more than double to almost $75 billion in the next five years, driven by increased customer preference for personal mobility after the pandemic, according to CarTrade, a platform for classified automobile ads.

There has been a sharp increase in customer preference for personal mobility since the pandemic. This, coupled with easier access to financing solutions and the government’s move to register sales of pre-owned vehicles to help expedite the transfer of ownership, will lay down a structure for the used car industry, CarTrade Tech managing director Vinay Sanghi said.

The used car market in India was valued at $32 billion in 2021.

The Ministry of Road Transport & Highways recently issued a draft notification requiring used car dealers to secure an authorisation certificate from the respective state transport authority and to transfer the ownership of vehicles they are selling to their names. The measure, once implemented, will empower stakeholders, safeguard buyers and add an impetus to the used car segment in India, CarTrade said.

“There is enough demand in the market. Supply though is a challenge currently,” Sanghi said. “Sales of pre-owned vehicles grow basis the population of vehicles available in the market. It should be higher by 3-5% than new car sales this fiscal.”

According to Sanghi, who is also the company’s chief executive, consumer behaviour has altered significantly since the outbreak of the pandemic, and the ability to consume digitally has gone up. “Almost every vehicle purchase today is researched online. We have seen robust growth on our platform,” he said, adding that traffic on the platform had more than doubled in the last three years.

CarTrade registered 30 million average monthly unique visitors on its platform in the January-March quarter. It had 1.2 million listings for auction in the fiscal year ended March 31.

CarTrade has earmarked an investment of $100 million (around ₹800 crore) in the mid term to acquire and invest in companies which will either help it enter a new market or bring new products and technologies to customers, he said. “We want to digitise the entire ecosystem and offer value-added services, be it auto finance, leasing, insurance, servicing or ownership.”

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