Used Car segment

Introduction
The used car industry is composed of two major segments. 1. The first segment is made up of the new car dealers who accept trade-ins on the sale of new automobiles. 2. The second segment of the industry is made up of independent auto dealers.

Market segmentation
Used car market segmentation
10%

Unorganised sector 90% Organised sector

Interestingly, at least 90 percent of the used car market remains unorganized, while the organized market is a mere 10 percent. In the unorganized sector, used car vendors constitute 30 percent, while majority of selling/buying car is carried out between buyer and customer.

Unorganised sector market

30%

Used car vendors

70%

Individual deals

People like mechanics who check the vehicle and middlemen who handle the deal can influence a decision The second hand car dealer make anywhere from 5-10 percent by settling the deal through low quality parts

New Cars market share in India

Percentage Market share of New Cars

5.73 5.33
17.19 Honda 50.37 19.17 Tata Motors Hyndai Maruti

others

Used cars market share in India

Pricing

Condition Of the car Car Model Year of manufacturing Number of ownerships Number of Kilometers Run Competition in the market

New Cars vs Used cars: Six factors to consider

Financing Purchase price Depreciation Model year The brands future Layoff risks

Why is the used car market on an all time high in the Indian Automobile Industry

There is a 20% increase in the demand for second hand cars each year in the past 5 years. With the availability of higher end cars at much cheaper prices, people are accepting them gleefully. Higher rates of interest and less liquidity in market let to the increase of demand Higher middle class and rich class people would like to dispose off their cars once in two or three years to buy the new and fancy cars.

Growth in Used Cars Industry

As per the estimates of the car financers, the used cars industry is expanding at 25% - 30% against the 13% growth of the new car sector. In FY 2008, Indians purchased 1.5 million used cars compared to the 1.6 million new cars. According to the latest statistics, Maruti and Honda traded 66,000 and 2,769 used cars respectively. This indicated a 45% increase in their sales against the 2007 sales.

Growth in Used Cars Industry(contd..)

In the past few years around 55 latest used cars models have been launched in India. This trend is likely to sustain and expand in India till the car manufacturers bring in Rs 36,000 Crore into Asia's third biggest car market. According to a latest analysis the yearly used car demand in the Indian market is around 1.4 million cars. To benefit from the flourishing trend leading organized manufacturers like Automartindia Ltd and Maruti's TrueValue have made a foray into the used car business.

Major Players in the Organized sector

True Value Maruti First Choice - Mahindra and Mahindra Toyota U Trust Toyota Chevrolet OK- General Motors Auto Terrace - Honda

Maruti True value: Glance

Maruti True Value business expands the family of Maruti customers, providing reassurance to existing Maruti customers about resale of their cars and further emphasizes Maruti s Commitment towards enhancing customer satisfaction by continuous association during the vehicle ownership life cycle.

Unique Advantages India's largest certified used car dealer network 358 outlets in 210 cities and growing All car related services under one roof. Professionally trained manpower

Mahindra First Choice

Mahindra First Choice Wheels, pays tremendous attention to detail to ensure that each pre-owned car meets the highest level of quality. The objective behind the care and diligence exercised is to present the customer with a car in mint condition. Adavantages include quality assurance, safety and a hassle-free driving experience.

Other Players

Toyota U Trust Toyota: The company is named as Toyota U Trust. Launched in 2007, the company promises a truly global experience for customers who opt for used cars. Chevrolet OK- General Motors: Chevrolet OK, which deals with used cars. Inaugurated in the year 2009, the venture is slowly catching pace, and has opened ten outlets in the metros Auto Terrace Honda: Their venture is named Auto Terrace and has paved a system for evaluating cars from all brands and is fast gaining popularity.

Marketing Techniques

Advertisements in local news papers. Conducting Road show events Public awareness through Online adds to the prospective customers Investing on advertisements through pamphlets in the respective demographics

Advantages of buying a used car

The value of a used car is considerably lower than a new car, The depreciation cost is lesser as compared to the new car, Used car loans are simpler, easily available and cost lower than the new car loans Used car can be modified according to the owner's preference.

Advantages of buying a used car

Unlike purchasing a new vehicle with high insurance fees, you will receive a lower cost of insurance if you choose to buy second hand cars. Although buying new cars and used cars both provide loans, lease, or money-saving the majority of dealers who sell second hand cars often have shorter loan terms. If your investment is decided based on appearance and gas mileage, choosing a second hand car would guarantee the value and reliability it has provided over the years.

Disadvantages of buying a used car

Although used car dealers provide a warranty, it is only limited to a couple of months unlike purchasing a new car with full warranty. Purchasing a second-hand vehicle would offer you a lower trade-in value. The main disadvantage of purchasing used cars is that it has an unknown quantity. It is difficult to negotiate fair financing terms on an older vehicle.

Basis of Competition

Competition in this industry is high. Competition in this industry is increasing. Automotive industry is a volume-driven industry, and certain critical mass is a pre-requisite for attracting the much-needed investment The concept of attaining competitiveness on the basis of low cost and abundant labour, favourable exchange rates, low interest rates and concessional duty structure is becoming inadequate and therefore, not sustainable. India, with a rapidly growing middle class (450 million in 2007 as per NCAER Report), market oriented stable economy, availability of trained manpower at competitive cost, fairly well developed credit and financing facilities and local availability of almost all the raw materials. As per Automotive Mission Plan 20062016 (2008), the Indian Government recognises its role as a catalyst and facilitator to encourage the companies to move to higher level of competitive performance.

References
http://www.scribd.com/doc/19602194/AUTOMOBILESECTOR-best-ppt-ppt