Shift to BS 6 Means Exciting Times for Used Car Market

Shift to BS 6 Means Exciting Times for Used Car Market

Shift to BS 6 Means Exciting Times for Used Car Market
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The country’s used car market has witnessed a 12 % jump in sales in 2019, clocking sales of 4.2 million units 

The Indian automotive industry is bracing up to adhere to the April 1, 2020 BS 6 emission norm timeline. While the migration to BS 6 has been an exceedingly challenging affair for automotive OEMs and component suppliers, this emission transition could throw up an opportunity for the country’s used car market to make the most of it.

It is an open secret that prices of vehicles across the country would go up substantially, following BS 6 kicking in on April 1, 2020. BS 6 petrol variants are estimated to cost Rs 10,000-Rs 50,000 more, while BS 6 diesel variants are estimated to cost Rs 50,000-Rs 1 lakh more. And it is this significant price difference post BS 6 that will prompt consumers to explore the option of buying user cars. “It is because of the BS 6-driven price hike, there will be consumers who will want to take a serious look at the option of buying second-hand cars and the used car market could get a bigger push,” said a senior official of an automotive OEM.

The country’s automotive industry has been plagued by a prolonged slowdown over the past twelve months or so, but in what will come as a positive surprise, the used car market hasn’t affected in a big way like OEMs and suppliers have been. The country’s used car market has witnessed a 12 % jump in sales in 2019, clocking sales of 4.2 million units and is poised to post a 15 % increase in 2020. Since the price differential between a discounted BS4 car now and a BS 6 car after April 2020 is expected to be around 20 %, used cars across the country will be an attractive proposition for buyers.

The January 2020-March 31, 2020 period is also expected to witness vehicle manufacturers dole out hefty discounts to offload their BS 4 inventory. Even that, the sales momentum of second-hand cars is unlikely to be affected. There is a line of thought that sales of used cars will hit an upswing post April 2020 – the market will witness supply of latest models in the new car pool as there is a consumer tendency to upgrade less than 3-year-old cars even as old models gets shifted to Tier II, Tier III and Tier IV cities.

It may be pointed out that the used car market is gaining traction among Indian consumers as affordability holds the key in a country, where personal mobility users are largely dominated by two-wheelers. The growing preference for second-hand cars is a stark departure from earlier times, when owing a used car was taken with a pinch of salt as a new car in the country epitomised a person’s social standing.

Surely, the shift to BS 6 is an opportunity for the country’s used car market to slip into top gear!