[timuseravan]

Originally Posted by GTO

Covid-19 has delivered a devastating blow to the economy, liquidity, household savings & consumer sentiment. Used car prices will crash as there will be very less demand. I agree with Akshay though - just the entry level hatchbacks & sedans might retain most of their value. But the expensive / big car values will tank like never before.

I am not so sure the used market will crash. Middle class people with entry level hatches and sedans will hold onto their cars for longer resulting in lesser supply of used vehicles.
But wont the same hold true for expensive/luxury cars?

[Rathore_13]

My Dec 2018 XUV is on sale on OLX because I'm moving out of the country. Getting better offers now that the BS4 fever has died down. Just waiting for the lockdown to get over and seal the deal.

Looks like second car prices may not actually nose dive.

[GTO]

Originally Posted by kiranton

People will be skeptical to use train and buses.

Those who don't own a car and are using buses / trains will buy a motorcycle. The Tata Nano learnt this the hard way. Bikes are cheaper to buy & run, much faster from point A -> B and easier to park.

[ani_meher]

Planning to buy a car in 2022 and discussing in 2020?! Talk about long term planning! You put even analysts and pundits to shame. I say relax, 2 years is a big enough time to improve budget. Why to let your mindspace be involved in a decision 2 years away?

[vkochar]

I am in the opinion of the used car market beginning to nose dive massively once the gravity of the Post Virus Situation kicks in real time.

We all have to agree by now that the Virus is going to cause some irreparable long term damage to the economies worldwide.

What is the first industry to come to your minds when it comes to thinking about Life Post the Virus and that is the Hospitality Industry.

Travel & Tourism is going to be hit big big time. And they say and forecast it will be a minimum of 12 - 18 months before things go back to even normalcy of 50% and this is hotels / restaurants and tourism.

OLA & UBER had tens of thousands of taxis operating all over India - With tourism going for a complete halt there will be a huge percentage not able to pay EMI's and this will result in cars getting seized / sold. It will create a huge inventory of stock available suddenly. There will be great deals available.

The event management industry is likely to see a 80% drop and that means all domestic tourism like destination weddings etc can be forgotten for a good duration of time.

The Taj Is expected to remain closed until June. Even once it opens international tourism is not going to resume until early next year considering a good scenario. Could be later if things go south further in terms of the spread and the vaccine coming out late.

And then the biggest blow is going to be the Laying Off / Redundancies / Furlough's / Termination / Reducing manpower. This means liquidating immediately and the first thing one can live without is a car. Downgrading will happen. Bigger car to smaller car / smaller car to Bike. From 3 to 2 and from 2 to 1 in terms of numbers.

Also the Work from Home scenario is going to suddenly see a sharp increase which means unnecessary cars will be sold.

We have 4 cars in our house and 2 cars in the company and a few bikes. I have already thought of getting rid of one car.

I was planning to get a Luxury car and that thought is out of the window now.

And this is when my business is seeing a drop of 20 - 30 %.

The longer this lockdown is going to last the bigger our problems are going to get. The government knows this and they really need to start opening before major catastrophe begins. The virus is going to stay in the society and we will have to live with it. To think a further 2 - 4 weeks will eliminate it is wishful thinking. It will resurface and there will be lives lost. This lockdown has lowered it and should make people understand the times lying ahead there will be a lifestyle change and how intelligently do we adapt it.

The nature is healing itself and that is the good part.

Cars unfortunately will be a luxury.

Look at the Oil Price today !!

[CarJunki]

Utilization factor of already existing cars in garage will rise. Meaning people who already were having cars and were trying to use other means of transport will start using cars more. Not sure with depressed incomes, any sales increase will happen to both new and old cars. In fact we will see great declines in new car sales.

Two wheeler is a different ball game. This i am not sure how it will pan out.

[ramnaresh_2000]

I was thinking of below scenarios for used cars dealers -

Imagine I have a used car business running successfully, I purchased some hot selling vehicles from owners before lockdown, say Creta, Seltos, Swift, XUV 500 etc.

Scenario 1:

I took loan/OD from my bank to purchase all above stock and have to pay xxxxx amount of EMI every month to bank. Lockdown started and I have zero customers and a lot of stock lying around.

I then opt for bank's moratorium and skip EMI's for say 3 months. I am aware that bank will still charge me more interest at end of the tenure. So the only possible way to recover my money is to pump up the prices or slash my commission on deals which will have negative impact on my cashflow and business.

In this scenario, as a customer I may get some sweet deals on my purchase, as the seller is in immediate need for cash to sustain his business.

Scenario 2:

I took loan from my private lenders (on rotation) to purchase all above stock and have to pay xxxxx amount every month to my lenders. Lockdown started and I have zero customers and a lot of stock lying around.

I have no option of moratorium, the lender's want their money bank with interest at any cost, so I either pay them back with my savings or the lender's take over my stock to recover their losses. I still have to pay rents, if I don't, then owners will cut it from the advance I paid them.

In this scenario, as a customer I may get some sweet deals on my purchase, as the seller is in immediate need for cash to sustain his business.

Scenario 3:

This never happens, but let's say as a business, I have a lot of cashflow ready and have not taken any loans from anyone. I am safe. However, businesses these days do not work this way.

In this scenario, as a customer I will not get any good deals on my purchase, as the seller is in no need for cash to sustain his business. I would not prefer this seller as other sellers are offering me better deals. Will this seller be able to survive such loss?

I am no financial expert, but just thinking out loud here as I have no better things to do, thanks to lockdown

[Axe77]

Here is my take on the post Covid world on auto sales.

1. Lots of people will have either pay / income cuts or job loss. Many who don't have a job loss may still "fear" job insecurity, combined with existing pay cuts perhaps.

2. In this environment, I feel any discretionary spending is going to be severely curtailed. A higher savings culture is going to be ingrained at least for the foreseeable future.

3. Point 2. means that many car upgrade decisions are going to be postponed, therefore there will be a section of used cars that won't hit the market at all in the near term as people decide to hang on to their existing vehicles.

4. To the extent there is stock sitting in the used car market, some of it has already sat on shelves for a while (used car dealers have a tolerance working capital cycle of 45 - 60 - 90 days maybe within which they like to churn out their cars). If their working capital cycles have been stretched they may be willing to let go of their inventory very close to the acquiring cost.

5. True, many people may prefer pvt transport to public transport but in my view, people who were typically relying on such public transport probably (a) either have a car and will simply use it more than they previously did; or (b) maybe will contribute to some extent to two wheeler sales, at best entry level cars. Its not going to move the needle significantly on car sales across categories.

6. Memories are short but the financial and economic impacts are longer. The desire to avoid public transport is not going to last beyond 2020 I feel and will go away quickly, specially when a vaccine or cure is found. The ability to invest in a car will likely be impaired till a lot longer.

7. Mass market cars (read everything under 25 lakh) will be worse hit than luxury segments. The super rich have a way of riding through economic crisis better than the middle class / employed class. If super premium brands give extraordinary deals, then it may still bring some luxury footfall into showrooms, specially from the super rich who know they've had a rough patch but also know they're going to ride it out. They may take the plunge for a really sweet deal. This might be more so given that lending rates for the next 6 - 12 months are going to be at a pretty low level until they resume rising back once things are more stable.

[gb97ce6]

Considering we are still in the early stages of this pandemic, predicting how consumer markets will react is pretty much impossible. If this is a long drawn out war then the outcome will be beyond what most consumers can handle. Car market whether used or new will crash like everything else. Even in best case scenario I really don’t think everyone is going to rush to buy cars and houses which happen to be the most expensive purchases. Till a cure is found or till the pandemic subsides it will certainly be a buyers market for sure!

[adi.mariner]

I am hoping for a crash in the pre-owned German car prices. I have been browsing through OLX and Quikr and there seems to be no indication of the same. Maybe it will be evident when the actual negotiations take place after the lockdown.

[Heart_Revs]

I am a middle income individual and most of the automobile market is running because of people like me. I form the majority of thier customers and my choices range from 4-12 lakhs segment ( humble Alto/Santro/Kwid to City/Verna/Ciaz).

Here is what I am going to do(and assume that same holds good for average car buyer who form 80% of car buying junta):


1. Work from home . If commute is necessary then 2 wheeler is preferred or use my existing car. With reduction in monthly running , I might revisit the need to purchase a car itself.
2. Hold on to my money as far as possible. Use my existing car till its nuts separate from the bolts. No tendency to upgrade.
3. I may buy a car but the car buy will be such that it should get the job done. No fancy or aspirational buys.
4. If I was in a market for i20 I will settle for i10 now. If I were buying a ciaz I would settle for i10/i20 now.
5. I will buy used car but only if I were comfortable buying used car earlier irrespective of pre/post- covid. So Covid- may not expand the pre-owned car market significantly.


So while there is a reason to believe that supply of cars in pre-owned market will shrink, the tendency of buyer to hold on to his money will also increase. In such a scenario it is the customer who always wins the price war. Initial segment may not see severe price correction. However, expect some downfall in used car prices especially above 8 lakh segment. Luxury rides are going to see the biggest fall.

To summarise, whether used car or new car- higher the price lesser the demand and bigger the fall.

[Ashish0485]

There has been an inexplicable pent up demand after every major pandemic or calamity in the history. I see the demand for cars increasing, if not immediately, surely in 6-12 months period.

[twin_turbo]

Automobile industry is one of the worst hit during this crisis after tourism and aviation industry.

Though there will be a slight increase in used car demand because people do not want to use public transport, this increase will be hugely overshadowed by the dip caused mainly due to various reasons mentioned in this thread. Majority of the salaried workers would not make a spend as large as this with a looming recession. Every one else is out of an income or has low income now which will make them spend wisely. As per manheim used vehicle value report, prices of used cars has fallen 11 percent in the USA in the last two weeks. We should expect something similar in India.

source : https://publish.manheim.com/en/servi...lue-index.html

I was planning on picking up a pre-worshipped compact SUV but do not want to buy one for another year now. I am partly hoping that the prices would fall and partly do not want to spend such a large amount now.

[07CR]

Originally Posted by Tulok

Sounds great if things go that way. I'm pretty sure first generation fortuner will also come under that category.
Indeed it'll be a good time for people like me who's on the hunt for pre owned cars.
Thanks for the hope during this trying times

You might even get the 2nd gen fortuner at those prices. I am currently seeing plenty of 2nd gen fortuner on internet in the price bracket of 10-12 L, with a disclaimer as NEGOTIABLE PRICES. This is before the lockdown!

[zavegur]

Our car has been with us for just under 5 years and with the kids growing up we wanted something big- although none of them really wanted to let go of the Figo.

However, my car's EMI is finishing off in a 8 months, and I was hoping of letting it go for a 4x4- Thar/ Scorpio used. I was also quite interested in the new Thar and hoping to ease off the EMI, I will have to bid farewell to the Figo- my wife was of interest to hold on to Figo and still buy a Thar/ Scorpio and that would ask me to tap from my savings. The boy in me was also looking for a good deal on a used Z900 and still keep the car.

Well this was a month ago when WFH started. Now with risk in salary cuts/ layoffs/ bleak business outlook- we have pretty much thrown all the options out of the window.

Best position to be in is to have what you have, dig deep, consolidate and then make the splurge atleast a year later.

All this has not stopped me from browsing deals on the web. With no buyers for the listed, I dont think the pricing is on par with demand- a correction is expected after a month post lock down. Bangalore used vehicle market is unbeliveaby high (compared to other big cities)- this recession (?) would do bring the price down considerably. So serious buyers, stay patient and keep an eye out for deals and of all other impediments in your personal finance due to the purchase. Sellers will have to bite the bullet unfortunately.

Z