Droom founder-CEO Sandeep Aggarwal said traffic on his platform is up 175%, and leads are up 250%. He has $6 billion worth of inventory on the platform. But, while customers are still rooting for old favourites Swift, Dzire, Honda City, i10, Scorpio and Santro, among others, their ability to buy has dropped by 13%-15% during the lockdown, pushing them to scale down their choices to slightly cheaper wheels.
However, financing has increased — from 20% to 30-35% after the lockdown.
Two-wheeler financing is still “a huge challenge” said financiers and marketers. A combination of all these has pushed the prices of used vehicles by 1-2% .
“While June demand was higher than both June 2019 and January 2020, supply is an issue because customers are not buying too many new cars. So, exchange programmes are not bringing in fresh supply of used vehicles. Additionally, the loan moratorium till August means the stack of repossessed vehicles is also low, so prices are going up,” said Mahindra First Choice Wheels CEO Ashutosh Pandey.
Most of the demand is coming from smaller towns and cities, which are not under lockdown. “There are some metros including Bengaluru, NCR and non-metros like Jaipur and Lucknow which have recovered better, but with more containment zones in place in these cities, tier-2 and -3 demand is showing strength,” said Cars24 co-founder and CMO Gajendra Jangid .
As for used two-wheelers, the demand is strong though financing is a big problem. Cars24, said Jangid, launched its pre-owned two-wheeler platform on May 4 with Delhi-NCR and is already selling 300 units a month. “We plan to scale up to 30 cities by end 2020,” he added. As a new category for organised used car platforms, pre-owned bikes are growing very fast. “Used bike sales are growing at double the speed of used cars on Droom,” said Aggarwal. And while banks and NBFCs are still reluctant to finance used bikes, the good news is the financing penetration has gone up in pre-owned cars and SUVs. Droom, for instance, saw an 85% increase in loan application in June alone.
In Video:Covid-19: Used car, bike sales grow as people avoid public transport