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Old 25th September 2015, 23:58   #16
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Default Re: The Indian Used Car Industry-An analysis from Management Punditz

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Originally Posted by Rajeevraj View Post
Came across this nice article by Management Punditz on the Used Car Industry in India. Some good charts and numbers.

Indian Used Car Industry

Key extracts:
  • Considering the huge amount of launches in the last few 4-5 years upgrade cycles shrinking, the used car market as mentioned above is definitely going to explode.
  • Many people still have a block against buying used, but as the sector continues to evolve into a more matured reliable model, customer confidence in buying used is going to increase.
Very interesting information Rajeevraj.

I have a query:
If the upgrade cycles shrink, the prospective buyer may find that the model that he intends to purchase has been discontinued from the production. Will this affect the used car sales? Will the used car market prefer the cars having long life-cycle and huge population?

You are bang on the point about the mental block against buying a used car. Some innovative entrepreneur (backed by venture capital, if necessary) can change this mental block. Mass brain wash is the main challenge IMO.
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Old 26th September 2015, 12:29   #17
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Default Re: The Indian Used Car Industry-An analysis from Management Punditz

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Originally Posted by Rahul Bhalgat View Post
Very interesting information Rajeevraj.

I have a query:
If the upgrade cycles shrink, the prospective buyer may find that the model that he intends to purchase has been discontinued from the production. Will this affect the used car sales? Will the used car market prefer the cars having long life-cycle and huge population?
I meant the people upgrading cars more frequently and not the manufacturer upgrade cycle.

Most models in our market-Especially the popular ones have a long life span. And even post discontinuation, the service and spares support will be there for 7 years. Today I think the used car market prefers the safe and popular cars, but I personally think that will change over the next few years.

Even today there is lot of demand for niche, mod friendly, performance oriented discontinued cars like the Zen, Fiesta 1.6, Baleno etc.
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Old 28th September 2017, 13:13   #18
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Default Re: Used car market trumping new car sales

Used car sales are apparently hit bigtime by GST. In Ahmedabad for instance, Economic Times says that volumes are down 30%

Quote:
“Pre-owned car sales volume has declined by 30% compared to Navratri last year,” said Jainish Prajapati, an official at a car dealership in the city.

Market estimates suggest an average of 5,500-6,000 used cars were sold every month in Ahmedabad and that number has come down to 3,500 to 4,000 units this month.

According to dealers, higher GST rates have adversely affected sales. Under the new tax regime, pre-owned cars attract 28% GST plus cess, which has narrowed buyers’ budgets.

Under GST, a customer has to pay 28% GST and additional cess depending upon engine capacity. Before GST, a customer had to pay 1% VAT till a maximum up to Rs 2,000 for used cars.
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Old 28th September 2017, 13:19   #19
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Default Re: Used car market trumping new car sales

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Used car sales are apparently hit bigtime by GST. In Ahmedabad for instance,
But this is contradictory to discussions on the other thread

http://www.team-bhp.com/forum/indian...ml#post4267491 (Effect of GST on Car Leasing)

I don't think they can apply GST on used cars if they are not giving Inputs to businesses on GST. Linking this with depreciation won't be correct and there can be litigation.

I believe reasons of low sales of used cars can be lack of liquidity, a lot of cash has gone to banks and people who have now funds in bank realise the value of this and won't like to splurge this tax paid/ saved money on Cars. Previously it was mostly cash driven, 20-30 % cheque and balance cash. Also on old cars beyond 10 Lac, 1 % TCS needs to be deducted which also most guys wants to avoid.
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Old 28th September 2017, 14:13   #20
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Default Re: Used car market trumping new car sales

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Originally Posted by GTO View Post
Used car sales are apparently hit bigtime by GST. In Ahmedabad for instance, Economic Times says that volumes are down 30%
I think GST on used cars applies to used car dealers and not individuals selling their own personal cars. Because, GST applies on goods or services supplied ...in the course of furtherance of one's business. If I sell my personal car, it is not furtherance of my business as selling cars is not my business. But a used car dealer is a dealer, a business entity and hence, he would be probably liable to pay tax. So, this move would finish used car dealers and people would buy directly from car owners. Correct me if I'm wrong.
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Old 28th September 2017, 17:42   #21
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Default Re: Used car market trumping new car sales

Only Toyota appears to not be affected by this. Innova and Fortuner continue to rule the roost. Innova's being good at 8-10L and Fortuner [done under 50,000 kms] at over 20L.

Silver lining for owners but bad for pre-worshippers
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