RESEARCH ON BUYING AND SELLING PATTERN OF PRE-OWNED CARS IN INDIA

Abstract

“Consumer behavior study is quite a challenging task. If a company wants to survive, it should be able to compete well by understanding the consumer mindset. Used Car Market is a key growth indicator in develop countries while it is a emerging automobile segment in the developing markets like India. Generally, this market is observed w.r.t new car. A ratio between Used Car sales & New Car sales provides the market size & opportunity for growth.” “Indian economy has witnessed consistent GDP growth in last 2 decades which increased the new car sale and total car park. Frequent launching on new models by all the OEMs and entry of new OEMs in India has increased the used car sales and right now used car sales is 1.3 times of new car sales.” “Although market is 1.3 times of new car but still there is a huge gap between demand & supply of used cars. A famous theory given by an American economist Mr. George Akerlof is used to describe the problem of Demand & Supply gap issue in Indian used car market. This theory stated that the quality of goods traded in a market can degrade in the presence of information asymmetry between buyers and sellers, In last market left with bad quality products and then no buyer to purchase these lemons.” “Each market is shifting from only Brick & Mortar platform to digital platform, presence of many online websites like Cars24, Cardekho etc. are creating a big challenge for offline players in India as well. Market is divided among organized, semi-organized, unorganized and customer to customer sale. Earlier unorganized players very dominating in the market now organized players has increased their foothold.” “The main purpose of this research is to understand consumers of used car market. Focus area was to understand the impact of factors linked with Brand, Price, Quality & Aesthetic on consumers' decision making while buying a used car. Also, it has been explained why there is gap between demand & supply in used car market and what’s the role of opinion leader in used car market.” “The project was started with literature review and gap identification. It was found that Brand, Price & Quality are representing very limited interest of the customer. On the other hand, there are no of factors which are linked to these categories. Further, most of the decision-making 9 | P a g e sub-factors related to these 4 main categories were identified. Secondary data with results was extracted from other report & researches. To collect primary data a questionnaire was designed, floated and it was filled by participants. 28 responses were received from participants which was analyzed. The findings show that there is a positive relationship between Brand, Price & Quality of used car on consumer buying behavior while the Aesthetic criteria doesn’t impact the behavior. There were 4 hypotheses out of which 3 stands rejected and 1 stands not rejected. Brand is combination of brand of the product and outlet brand both. Price factor involves price of the car, insurance cost, maintenance cost, fuel cost and finance options. Quality is dependent upon mileage, car condition, no of owners, age etc. While aesthetic looks like color are not impacting the decision.” “Consumers are trying to shop at online as well as offline stores, but they are happy to sell the cars online but wants to buy only offline. It is evident from the study that both the platform will co-exist. Online platforms are very good in lead generation while offline stores give confidence to the actual buyer as well as seller.” “Role of opinion leader is very much recognized in every decision making of a customer. There is a rise in demand of field expert in used car space who can guide the buyers and fill the void of limited knowledge, but maximum people are still relying upon their known’s feedback.