The FINANCIAL — Price, less depreciation, social status upgrade via luxury cars make used cars ownership attractive. Negative perceptions of vehicle ROI, lifespan, stigma take sheen off used cars. About half (47%) Indians said that they would consider buying a Used Car from a Company Showroom; according to a new study by global market research company Ipsos.
The study was conducted by Ipsos to map perceptions towards Used Cars among 1029 Indian respondents across eight cities – Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Lucknow and Ahmedabad.
The hoopla around online classified advertising sites like OLX, Quickr and others notwithstanding, only about 11% respondents said they would buy a Used Car online; 41% respondents were undecided.
So, how do Used Cars fit in with the lifestyle of Urban Car Buyers? Ipsos study shows different mind sets for Used Cars: 30% respondents said they would never buy a Used Car; 23% respondents said they would buy one to upgrade from a 2-wheeler to a 4-wheeler; 22% respondents were undecided; 13% respondents would buy one as a second car at home and 12% said they would buy one to upgrade their status – by buying a fancy luxury car of a premium automaker.
Amit Adarkar, CEO of Ipsos in India said that these are interesting insights from stand point of a car maker: “Consumers have different motivations for buying and not buying a Used Car and marketers will find these insights useful, after all India has some of the lowest penetrations of passenger cars vis-à-vis other markets, just 15 cars per 1000 persons, unlike other markets like China (60/1000), Brazil (160/ 1000) and Indonesia (42/ 1000).”
The study further delved into the psyche of consumers to find out their concerns towards ownership of Used or a Pre-Owned Car.
Interestingly, consumers are concerned about the ROI and seem to tread on caution: 26% respondents felt that Used Cars can work out more expensive on pocket post purchase; 23% felt that lifespan and longevity of a car would be suspect; 19% were concerned about Certification & After Sales Service; 19% were not confident about the functioning of a pre-owned car and 13% felt some bit of stigma about owning a Used Car, felt they would be perceived as untrendy and uncool.
“Some of these concerns do take sheen off Used Cars, but these concerns are unfounded; Certified Cars are meant to be road ready for the long haul,” said Adarkar.
On the flip side consumers listed some tangible positives of owning a Used Car.
31% saw benefit in price in ownership of a Used Car; 24% felt it depreciates lesser vis-à-vis a new car; 19% felt a premium luxury Used Car is accessible and can elevate social status; 15% felt stakes were much less for buying and selling used cars; and 11% felt that it makes car ownership a reality for those who felt that car ownership was beyond their means.
Adarkar sees some paradox here with “Yay Sayers” & “Nay Sayers” being equally upbeat.
Interestingly, views were divided on preference of Used Cars. 38% said Diesel; 31% said they would prefer a petrol Used Car; and 30% rooted for a CNG or Hybrid Used Car.
Majority of the respondents polled supported governments proposed decision of hiking tax rates on old cars.
Discussion about this post