Q2 used-car Sales Surge: 48.5% of Buyers were Salaried Professionals

Gurugram, 09 July 2024: CARS24, India’s leading AutoTech company, has today released its highly anticipated DriveTime Quarterly Report for Q2 2024. The period from April to June (AMJ) marked a dynamic time for salaried professionals, as the appraisal season brought promotions, bonuses, and new roles. This quarter, approximately 48.5% of all car buyers were salaried professionals celebrating their career milestones by purchasing personal cars. 

As cars become a necessity, more corporate employees are choosing to invest in personal vehicles for their daily commutes and lifestyle upgrades. This shift is driven by a rise in disposable incomes, attractive financing options, and a desire for enhanced personal mobility. Notably, the majority of these purchases we re made by employees in metro cities such as Delhi, Mumbai, and Bengaluru, underscoring the urban demand for personal vehicles. However, the pre-loved cars’ popularity extends beyond metro cities, with explosive growth seen in non-metro markets. Agra, Coimbatore, and Nagpur are leading the charge, highlighting the widespread appeal and demand for personal vehicles and the growing love for pre- owned cars across the country.

Gajendra Jangid, Co-founder of CARS24: “This quarter has been nothing short of extraordinary. With so many services coming in, we’re seeing incredible diversity in our customers' car preferences and buying patterns. It’s been exciting to evolve alongside our customers and witness how the future of car ownership in India is taking shape.”

Drivetime quarterly report by CARS24 navigates through such interesting trends that shaped India’s buying behaviour in the quarter gone by. 

Pre-Loved Car Market Grows > 10% Surge in Tier II Cities 

Cities like Agra, Coimbatore, Nagpur, and Vadodara witnessed significant growth in sales during the second quarter, with a 25% increase in sales on average per city.respectively. This surge can be attributed to the economic growth in these cities and rising disposable incomes. The growing awareness of the cost-effectiveness of pre-loved cars is driving more buyers to opt for second-hand vehicles, with popular models including the Grand i10, Swift, Baleno, Kwid, and the Honda City (sabki pasand).

Interestingly, other cities including Ahmedabad, Bengaluru,  Hyderabad, Mumbai and Pune also saw a remarkable surge in pre-loved car sales. These cities have all experienced an increase in sales in the second quarter. This trend indicates that the nation is increasingly moving towards vehicle ownership, with pre-loved cars emerging as the smarter choice. Offering a blend of affordability and reliability, these vehicles are appealing to the modern consumer.

People recognize that pre-loved cars offer significant savings, providing similar functionality and reliability at a fraction of the price of new cars. This makes them an attractive option for budget-conscious consumers. Additionally, robust digital infrastructure and expanding online marketplaces have made it easier to browse and purchase used cars with confidence, ensuring transparency and trust. As a result, there's a growing inclination towards pre-owned vehicles.

Consumer Favourites and Emerging Trends

• Top Cars: Maruti Suzuki Swift and Hyundai Creta remain the crowd favourites, leading the pack in popularity.
• Dominant Brands: Maruti Suzuki, Hyundai, Honda, and Tata continue to reign supreme in the market.
• Rising Stars: Kia and MG are gaining traction with a notable uptick in interest and sales.
• Most Purchased Models: Hyundai i10 and Maruti Alto top the charts as the most bought models.
• 2024 Bestsellers: Grand i10 and Baleno are the highest- selling models this year.
• Swift Upgrades: A remarkable 70% of first-time buyers are opting to upgrade directly to the Swift.
• Luxury Picks: The most expensive car sold was the Fortuner, fetching INR 33 Lakhs.
• Budget Choice: The Alto K10 holds the record as the cheapest car sold at INR 70,000.

Interestingly, Tata's market share has grown from 4% to 7%. Kia, Nissan, and MG are also seeing increased market presence.

SUV Models like MG Hector, Nissan Magnite and Jeep Compass become a crowd favourite 

The SUV-centric trend has extended beyond new cars, making its presence felt in the used car market with a 4-6% growth since FY21. This year, standout SUVs like the Brezza, Sonet, Ecosport, XUV300, Taigun, and Tiago are dominating Indian roads. Over the last five years, the share of SUVs has increased from 10% to almost 20%, reflecting a significant shift in consumer preferences.

Here's the current breakdown of body types in the used car market:

• Hatchback: 60%
• Sedan: 21.%
• SUV: 19%

So while SUVs are gaining popularity, Hatchbacks continue to be the undefeated king. However, in the second quarter, hatchbacks have lost some of their market share to sedans, while SUVs continue to see a rise in popularity.

In the used car market, Maruti Suzuki leads with a 34.5% share, followed by Hyundai at 26.9%, and Honda at 10.6%. The Grand i10 and Baleno are the highest-selling models in 2024, overtaking the Swift, which was the top choice in 2023 and 2022. SUV models are seeing the highest jump in popularity, with the MG Hector experiencing a 4x increase, Nissan Magnite a 2x increase, and Jeep Compass a 2x increase in 2024 compared to 2023.

Unique Gifting Trends Boost Car Sales in Q2 2024

In the April to June (AMJ) quarter, CARS24 observed an increase in sales, driven not only by personal needs but also by the desire to gift vehicles to family members. This surge was particularly evident on May 10th, during Akshaya Tritiya—a day traditionally celebrated for initiating new ventures and making significant purchases believed to bring good luck and prosperity. Most cars were sold on Akshaya Tritiya this quarter, reflecting the cultural significance and the perception of pre-owned cars as both a wise financial choice and a bringer of good fortune.

Furthermore, the DriveTime Quarterly Report highlights that unconventional gifting days like Mother’s Day and Father’s Day contributed significantly to this trend, with over 300 cars sold across the country on these occasions. Interestingly, Mother’s Day (May 12th) saw higher sales compared to Father’s Day (June 16th), suggesting a growing tradition of gifting pre-loved cars to mothers. This trend underscores the appreciation for mothers, hinting that they are perhaps taking their new wheels out for a spin more often, enjoying the mobility and freedom that comes with owning a car.

The report also points out that cars like the Swift, i20, and Creta were among the most gifted models. This preference highlights how pre-owned cars are becoming popular gifts due to their cost-effectiveness and value. As cars become more affordable and accessible, they are increasingly being chosen as thoughtful and practical gifts for loved ones.

Strength and Safety: The New Priorities for Indian Car Buyers

Today’s car buyers are not just captivated by shiny exteriors; they are increasingly prioritising strength, safety, and reliability in their vehicles. This shift signifies a deeper understanding of the importance of long-term value and peace of mind. While fuel efficiency used to be a major deciding factor, it has now taken a backseat as buyers prefer sturdier, safer cars—even with petrol prices at INR 100 per litre and diesel at INR 90 per litre.

Quality and build are now more critical than ever, with 78% of Indian car buyers prioritising safety features such as airbags, ABS, EBD, and ESC. This trend indicates that consumers are looking beyond superficial aesthetics, focusing instead on the structural integrity and safety of their vehicles. 

Reflecting this shift, market share of brands like Tata, Mahindra, Volkswagen, and Skoda has increased to 15% These brands, known for their robust build and comprehensive safety features, are becoming more popular among discerning buyers.

Buyers are diligently checking vehicle histories and ensuring cars have been well-maintained. They seek robust performance, enhanced safety features, and lower maintenance costs. They are thoroughly assessing the reliability and overall value of vehicles, making well-informed decisions that blend practicality and style. They are meticulous in ensuring their investment is sound and beneficial in the long run.

Consumers are not just excited about owning a car; they are keen on ensuring their vehicle meets stringent safety standards and delivers dependable performance. This conscientious approach to car buying underscores a significant shift in consumer behaviour, emphasising the importance of durability and safety over mere aesthetics.

Beyond Basics: The Must-Have Features for Indian Car Buyers

Although previous quarters saw an increase in automatic car sales, AMJ quarter saw 80% of buyers opting for manuals. This shift is driven by several factors: cost-effectiveness, better fuel efficiency, greater control, and lower service costs associated with manual cars. Additionally, many Indian drivers perceive manual transmissions as more reliable and familiar, further contributing to this preference.

Features such as sunroofs, GPS-integrated systems, and rearview cameras have become standard expectations for car buyers, enhancing their driving experience. Leather interiors, alloy wheels, ambient lighting, turbocharged engines, and technologies like 360-degree cameras and sunroofs are among the most sought-after features, highlighting a demand for premium yet familiar enhancements.

People are upping their game with fancy number plates. Interestingly, number plates starting with 007 were some of the most popular among customers. Whether it's because people want to channel the charm of "Thala" or the coolness of James Bond, these plates are in high demand. After all, who wouldn't want to feel like a superstar or a secret agent every time they drive?

Value-added services are also on the rise, with consumers spending an average of INR 10,000 on extended warranties and tech upgrades. This trend reflects a commitment to enhancing the overall car ownership experience, as today's consumers seek not just utility or luxury, but also peace of mind and comfort.

INR 328 Crores in Car Loans Drive Car Ownership Trends

Used car financing is transforming car ownership in India, empowering more people to achieve financial independence. The average age of buyers has dropped from the mid-40s to the early 30s, with younger individuals increasingly turning to loans to facilitate their purchases. This shift highlights the growing accessibility and financial flexibility in the used car market, enabling people to realise their dreams of car ownership earlier in life.

In the second quarter, loans worth INR 328 crores were disbursed, thanks to an innovative financing model that skips traditional down payments. This approach is particularly popular with first-time buyers, signalling a major shift towards easier car purchasing options. Millennials are driving this trend, eager to enhance their mobility and enjoy personal transport.

This financing wave is not confined to urban centres; about 30% of loan applicants in Q2 2024 came from Tier 2 and Tier 3 cities, indicating that car financing is reaching Bharat. The Hyundai Grand i10 is a favourite choice across the nation. The average EMI for used cars in Q2 was INR 12,000.

Women have taken a prominent lead in car financing this quarter. They have secured 10% higher loan amounts than men, reflecting their growing economic empowerment and confidence in financial management. They are also getting their loans approved faster and consistently paying their EMIs on time. This trend underscores women’s increasing role in reshaping societal norms in India and their desire for independent mobility.

Fun Facts

1. The Lowest loan amount was INR 93,000  for the model Alto k10
2. The Highest Loan amount was 16 lacs for the model TATA Harrier
3. 30% of people received the option of zero down payment because we firmly believe that nothing should stand in the way of making your car dream come true.

Time for Upgrade: People sold cars worth INR 1500 crores to CARS24

In the second quarter of 2024, Indians continued to embrace the opportunity to sell their cars to CARS24 with transactions worth INR 1500+ crore. This period witnessed an uptick in seller participation, fueling a lively and bustling market. Customers played a pivotal role in narrowing the demand-supply gap by introducing newer cars into the mix. 

People are increasingly choosing to sell their cars for several reasons. Many are looking to upgrade to newer models more frequently, reflecting a shorter ownership cycle driven by advancements in automotive technology and changing personal needs. Additionally, the desire for enhanced features, better fuel efficiency, and lower maintenance costs are compelling reasons due to which we are also experiencing a shorter ownership cycle of 4-6 years as compared to 8-10 years earlier.

Ruko Zara, Ab Hum Aapki Gaadi Bhi Chalayenge: Introducing Autopilot

We understand that life is too short to spend behind the wheel stuck on the Gurugram-Delhi highway ( or the roads of Bengaluru,  Mumbai ) so why drive when you can be driven? This quarter, we launched Autopilot at CARS24 to make life more convenient for car owners. So whether it is a work commute or a road trip across the country, Autopilot has your back with 2000+ rides covered. We observed a few interesting trends. 

With 85% of our trips happening within the city, it's clear that navigating city traffic is a real hassle, more people need drivers to escape the traffic and we’re there to do just that. Nearly 50% of the trips were one-way, with journeys setting off without a set return plan.

Interesting trends from Autopilot 

• Weekend Warriors: Fridays and Saturdays saw the most trips start, perfect for spontaneous getaways. Indeed, 45% of all trips were taken on weekends, with 61% of our outstation adventures beginning on these leisurely days.
• Father's Day Fun: On June 15th, just before Father's Day, we saw a 30% increase in users opting for Autopilot, making for stress-free rides and a perfect surprise for dads.
• Morning Rush: Our busiest hours are between 8 AM and 12 PM. It's clear nobody wants to deal with morning traffic, and Autopilot helps prepare for the day ahead
• Top Destinations: Uttarakhand and Himachal Pradesh emerged as favourite outstation spots, with customers eager to escape to cooler climes and breathtaking views.