Friday, April 3, 2009

Used car prices came down after nano launch

Now second hand car buyers are happy after nano launch.

With the much awaited world's cheapest car 'Tata Nano' car launched, dealers of used cars forecast around 30-40 per cent dip in the sales of used small car in the country.

Due to its "low" price tag, many customers opting to buy a used car may plump for a new Nano, though it comes comparatively with lesser cubic capacity, R Srivatsan President of MyTVS, part of the TVS Group engaged in selling used cars told PTI.

"It is because of this factor, we are expecting around 30-40 per cent drop in the market of A and B segment vehicles", he said. "However, once the car (Nano) hits the road, we will know the exact figure on that," he said.

Stating that the Nano design was very good and attracts more buyers, he said once the booking starts for Nano, there would be less number of people going for used small cars.

For the exact results, "we have to wait and see on how the market responds," he said.

Initially, there may be a slump in the sales of used cars especially Maruthi 800, Alto and Hyundai Santro range of vehicles, he said.

Srivatsan said a general trend was that instead of buying a used car for Rs one lakh, people would go in for a brand new Nano. However, if Nano performs well then the problem arises for these kind of cars.

"We have to stop procuring these cars or we need to purchase them at a very low price from buyers and that is the way I think we can manage the sales in future," he said.

Speaking in similar terms, Saravanan, an official of ToyotaFirst, engaged in selling used cars and a subsidiary of Lanson Toyota Group, said Nano might be a cost effective vehicle but we need to 'wait and watch' for its performance.

"When Maruti 800 was launched in the country, another vehicle Dolphin was also unveiled but we all know which has been successful, similarly, only after the Nano being formally unveiled we may come to a conclusion", he said.

The last two months registered a comparatively low sales for the company, he said. "Nano may be a top scorer on the cost but in the longer perspective, it is the performance that speaks. We have to wait and see."

Suresh, an executive of city based Jains Car Shoppee, did not expect any major impact on the sales of used cars with the launch of Nano. "Nano's engine capacity is very less as compared to other vehicles and I think that would be the deciding factor for purchase of the car," he said.

A Maruti 800 could touch at least 80 KM per hour and company officials of Nano said they could reach 60 KM per hour, he said.

However, Suresh also said that in the longer perspective "we have to see the performance of Nano".

A Vignesh, Head of Indiaautomobile.com, online automobile dealer and part of the Bharatmatrimony.com group, said since the formal launch of Tata Nano, there has been a 10-15 per cent drop in the sales of small cars. "This is mainly due to the mindset of buyers."

"Nano is brand new and even those who have planned to buy a car tend to wait for another three months to see Nano's performance and will then take a final decision. This 10-15 per cent may not be consistent," he said.

Stating that there may be some 'price correction' in the used small cars, Vignesh said, "if a 2005 model Maruti 800 is selling at 'x' price, it may be further reduced due to the Nano impact."

However, he said, there are over two million cars in Indian market and hence there would not be a big impact with the launch of Nano.

Source: economictimes.indiatimes.com

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