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Analysis of the used car market in India

Analysis of the used car market in India Analysis of the used car market in India
Release date 29.07.2019
Number of pages 62
Formats DOCX, PDF
Cost 45000 ₹

The relevance of research

In this study, used cars are the object. The used car market in India is getting bigger and more diverse every year. The automotive market is a set of economic relations through which the states of the market interact in order to exchange finished cars for cash or cash equivalents.


Purpose of the study

Analysis of the state of the market for the sale of used cars, assessment of the market size, analysis of competitors, as well as the identification of factors affecting the market for the sale of used cars


Content

Part 1. Overview of the Indian Used Car Sales Market

1.1. Definition and Characteristics of the Indian Used Car Sales Market
1.2. Dynamics of the volume of the Indian used car sales market, 2014-2018
1.3. Market structure by type of used car sales rendered in India
1.4. The structure of the used car sales market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity

Part 2. Competitive analysis in the used car sales market in India

2.1. The largest players in the market TOP 10
2.2. Market shares of the largest competitors TOP 10
2.3. Profiles of the main players TOP 10

Part 3. Analysis of used car sales consumption

3.1. Estimated consumption of used car sales per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis

Part 4. Assessment of factors of investment attractiveness of the market

Part 5. Forecast for the development of the used car sales market until 2023

Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators


Research excerpt

Part 1. Overview of the Indian Used Car Sales Market          
1.1. Definition and Characteristics of the Indian Used Car Sales Market       
The automotive market is a set of economic relations through which the states of the market interact in order to exchange finished cars for cash or their equivalents.
According to the condition of the car, the market is divided into:
- New car market.
- Used car market.
By car type:
- Car market.
- Light commercial vehicle market (often merged with the passenger car market).
- Bus market.
- The market of trucks and special equipment.
In this study, used cars are the object. The used car market in India is getting bigger and more diverse every year. This, in particular, is due to the fact that many citizens tend to drive good prestigious cars. However, the level of income does not allow to purchase a new car of the desired brand and configuration. A used vehicle, even with low mileage, is much cheaper.
The sale of used cars can be carried out by official dealers - salons, car markets, private trading floors, as well as by the owners themselves through ads or through acquaintances.
A car dealer is a company that represents a car brand (trademark) in one or more geographical locations, has trained personnel, financial resources, as well as trading, production and storage sites equipped in accordance with the requirements of dealer standards, for retail or wholesale (corporate ) sales, pre-sales and after-sales service of vehicles. In addition to new cars, many dealerships sell used cars.
Car market - any territorially limited space intended for trade, mainly by individuals and individual entrepreneurs, in finished cars and spare parts for them. 

1.2. Dynamics of the volume of the Indian used car sales market, 2014-2018       
Consider the dynamics of the used car market in India in physical terms. 
...
Diagram 1. Dynamics of the volume of the market for the sale of used cars, 2014-2018, thousand units
 

1.3. Market structure by type of used car sales rendered in India
The Indian OKVED2 classifier (as well as the previous OKVED classifier valid until 2017) does not separate the activities of market operators into sales of new and used cars. 
...

1.4. The structure of the used car sales market by Union Territories  
Traditionally, the leader in the structure of revenue is …

1.5. Assessment of current trends and development prospects of the studied market
...
- One of the main trends in the secondary market is increased transparency. In many ways, this is facilitated by inters dealers who are developing projects aimed at increasing the availability of reliable information about a used car. In the future, this trend will determine the structure of the market in the medium and long term.
- Buying advantage belongs to a used imported car. Today, many people are more likely to buy a foreign used car than a product of the domestic auto industry. Firstly, the level of comfort and technical characteristics of an imported car are many times higher. Secondly, despite the available mileage, foreign cars are more reliable than domestic ones. Third, lower fuel consumption. Nevertheless, in the coming years, the segment of domestic used cars will be supported by the entry into this market, for example, of Lada Vesta models, which were previously absent from the assortment of the Indian auto industry.
...
- Dealers have not seen a boom in demand for used cars lately. The increase in sales of new cars stimulates the secondary market, since the purchase of a new car is most often accompanied by the sale of the previous one, he explains, although sometimes customers are willing to consider a used car as an alternative to a new one. 
...
The buyer comes to the conclusion that the desired new car is too expensive, and decides to continue to operate the existing one. As a result, the buyer faces a choice: either to buy a new car on credit or buy a used car within the existing budget.
 ...
Information about the car without a personal inspection was not enough. It was during this period that the services of independent auto experts began to be in demand. Nowadays, people are also looking for used cars on internet marketplaces, and now all car information can be obtained online.
...
Transactions have become much more transparent and popular among customers, many banks have revised their lending conditions and lowered rates, bringing them closer to the conditions for new cars. There are other profitable options on the market: a payroll loan program, consumer loans, and so on.
...

1.6. Assessment of factors affecting the market  
Macroeconomic factors affect the dynamics of all sectors of the Indian economy, including the used car market in question. The main groups of factors are: economic, political, social and technological.
Economic
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
...
The growth of road transport (freight and passenger) is associated both with an increase in demand for these services due to the development of industries that need them, and due to the peak capacity of railways. At the same time, the opportunities for using cars are increasing, which is confirmed by the dynamics of the length of public roads in India. 
Used cars can often be used by owners to work in taxis, in general, the dynamics of transportation by such transport and the popularity of taxis is increasing.
...
Demographic (social)
...
Diagram 10. Population dynamics in India, 2010-2019, million people, %

 ...
Political
The tense political situation in interstate relations has a negative impact on all spheres of the Indian economy. The main activities of the state and the strategic tasks at present are the development of new models of cooperation with the US and the EU and the approval of India in the world monetary system. Anti-India sanctions and the generally sharp deterioration in relations between Western countries and India largely determine India's foreign policy. 
...
Participation of the state in the control of the industry.
...
Lack of special legislative acts
...
Legal restrictions on registration actions ...
Government support for the new car market. 
...
technological
Development of the information society and electronic commerce. 
...
Table 5. STEP analysis of factors affecting the used car sales market
 

1.7. Analysis of sectoral indicators of financial and economic activity     
Since there is no separate code for registration of sales of used cars in the OKVED2 classifier, the analysis used indicators for the generalized industry 45.1
...
Consider liquidity indicators in the motor vehicle trade industry. The indicator of current liquidity is a measure of the solvency of the organization, the ability to repay the current (up to a year) obligations of the organization. Diagram 12 shows the dynamics of this indicator.
Chart 12. Current liquidity (total coverage) by used car sales industry for 2014-2018, times

 ...
The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise. 
...

Part 2. Competitive analysis in the used car sales market in India         
2.1. The largest players in the market TOP 10    
...
In addition to official dealerships, used car sales are carried out through used car sales sites, car markets, private ads, and you can also buy a car from friends ...
The assessment of market shares was carried out by GidMarket on the basis of data on the number of used cars sold. Estimating sales in terms of value and share of sales based on revenue and other indicators is significantly complicated by the following factors:
- lack of official high-quality sectoral statistics;
- in a significant number of cases, it is difficult to identify the connection between the name of the Dealer (or the website) and the name of the owner (legal entity), since in the official statistics of legal entities, the indication of the website in the company profile is not mandatory, while the owners of the Dealer websites avoid publication of details and even the name of the legal entity of the company on the site;
- division of companies into several legal entities (business splitting), which does not always make it possible to estimate the amount of revenue, the number of legal entities the Dealer may have exceeds several dozen;
- the significant complexity of estimating the share of revenue attributable to the sale of used cars, excluding the share of revenue from the sale of new cars, the provision of services, after-sales service and other activities;
- the lack of information in the sources of official statistics (Rosstat, in particular) on the revenue of some legal entities included in the groups of companies under consideration;

2.2. Market shares of the largest competitors TOP 10    
Diagram 16 shows the structure of the used car market as a whole for the entire volume, and Diagram 17 details the sales of the Top 10 and other dealers.
...
Diagram 17. Shares of the largest competitors of the Top 10 among dealers in the used car sales market in 2018, %

2.3. Profiles of the main players TOP 10
...

Part 3. Analysis of used car sales consumption
3.1. Estimated consumption of used car sales per capita
Chart 19. Consumption volume of used car sales per capita, 2014-2018, Rs./person

In general, the consumption dynamics of used car sales per capita is similar to that of the market …

3.2. Market Saturation and Estimated Market Potential in India    
...

3.3. Description of consumer preferences         
Table 20 presents data for the top used car sales states in India. For comparison, data on the results of 2017 are also given; for information, data for the 1st quarter of 2019 is given.
...
The leader of the used car market is traditionally the domestic brand …
In the TOP-10 among the models, the largest market growth is also demonstrated by …

3.4. Price analysis  
...
Table 24. Average sales prices for used cars by Union Territories in 2014-2019 (April), Rs./pc.

Part 4. Assessment of factors of investment attractiveness of the market
...

Part 5. Forecast for the development of the used car sales market until 2023   
...

Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
In the conditions of the economic crisis and the first years after it, the opportunity to purchase used cars became especially relevant both due to the lower price level for them, and due to the fact that prices for used cars do not grow as fast as for new cars. 
...
For the dealer at such moments, a competent approach to pricing and sufficient stock are important. In general, prices for used cars are growing unevenly. On the one hand, they follow the dynamics of prices for new cars and react to new market developments. On the other hand, price changes depend on the volume and quality of offers on the market. Today, there is a gradual reduction in the fleet of cars up to five years old. 
...


Diagrams

Diagram 1. Dynamics of the volume of the market for the sale of used cars, 2014-2018, thousand units
2 Chart. Structure of the used car sales market by types (according to OKVED 2 classification) in 2018, %
Diagram 3. The structure of the market for the sale of used cars in India by the Union Territories (by revenue of market operators) in 2014-2018, %
Diagram 4. The ratio of the number of used cars sold to the number of new ones in 2012-2018, times
Diagram 5. Number of car loans issued in 2014-2018, thousand units
Diagram 6. Dynamics of India's GDP, in 2011-2018, % to the previous year
Diagram 7. Monthly dynamics of the US dollar against the rupee, 2014-2018, Rs. for 1 US dollar
Diagram 8. Dynamics of real income of the population of India, 2011 - 2019 (Q1), % to the previous year
Diagram 9. Dynamics of retail trade turnover, 2013 – 2019 (Q1), % to the previous year
Diagram 10. Population dynamics in India, 2010-2019, million people, %
Diagram 11. Profitability before tax (profit of the reporting period) in the sale of used cars in comparison with all sectors of the Indian economy, 2014-2018, %
Diagram 12. Current liquidity (total coverage) in the used car sales industry in 2014-2018, times
Diagram 13. Business activity (average receivables turnover period) in the area of ​​used car sales, 2014-2018, days days
Diagram 14. Financial stability (security of own working capital) in the sale of used cars, in comparison with all sectors of the Indian economy, 2014-2018, %
Figure 15. Car dealer networks in India in 2018
Diagram 16. Shares of the largest competitors in the used car sales market in 2018, %
Diagram 17. Shares of the largest competitors of the Top 10 among dealers in the used car sales market in 2018, %
Diagram 18. Dynamics of the total revenue of the largest operators of the used car sales market (TOP-10) in India, 2014-2018, billion Rs.
Diagram 19. Consumption volume of used car sales per capita, 2014-2018, Rs./person
Figure 20. Consumer preferences by age categories of purchased used cars in 2017 and 2018
Diagram 21. Forecast of the volume of the market for the sale of used cars in 2019-2023, thousand units
Diagram 22. Forecast annual growth rate of the used car market in India in 2019 - 2023, %
Diagram 23. Forecast ratio of the number of used cars sold to the number of new cars in 2019-2023, times


Tables

Table 1. Indicators of the length of roads and the use of taxi transport in 2013-2017, units rev.
Table 2. Indicators on the presence of motor vehicles in India for 2013-2017, units rev.
Table 3. Urban and rural population in India in 2014-2019, million people, %
Table 4. Indicators for monitoring the development of the information society in India in 2012-2018, units rev.
Table 5. STEP analysis of factors affecting the used car market
Table 6. Gross margin of the used car sales industry compared to all sectors of the Indian economy, 2014-2018, %
Table 7. Absolute liquidity of the used car sales industry compared to all sectors of the Indian economy, 2014-2018, times.
Table 8. The main companies participating in the used car sales market in 2018
Table 9. Basic information about the XXX participant of the used car sales market
Table 10. Basic information about the XXX participant of the used car sales market
Table 11. Basic information about the XXX participant of the used car sales market
Table 12. Basic information about the XXX participant of the used car sales market
Table 13. Basic information about the XXX participant of the used car sales market
Table 14. Basic information about the XXX participant of the used car sales market 
Table 15. Basic information about the XXX participant of the used car sales market
Table 16. Basic information about the XXX participant of the used car sales market
Table 17. Basic information about the XXX participant of the used car sales market
Table 18. Basic information about the XXX participant of the used car sales market
Table 19. Comparative characteristics Top-10 used car market participants, units change, rating of companies, number of points
Table 20. TOP-30 Indian regions by used car market volume in 2018, units rev.
Table 21. TOP 10 brands of used passenger cars in India in 2018, pcs.
Table 22. TOP 10 used car models in India in 2018, pcs.
Table 23. Used car consumer price indices for India 2014-2019 (April), %
Table 24. Average prices for the sale of used cars in the Union Territories in 2014-2019. (April), Rs./pc.
Table 25. Assessment of factors of investment attractiveness of the used car sales market


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