Entry-level and used cars may rule the roost

Average customers may opt for personal mobility as long term option, say experts

By Author  |  Published: 1st Jun 2020  12:27 amUpdated: 1st Jun 2020  12:40 am
Industry sees rise in the number of enquiries for entry-level cars.

Hyderabad: The automobile industry, hit hard by the lockdown across the country, would probably be looking at a new and entirely different buying pattern among its average customers. While the financial crunch resulted in potential car buyers putting it on hold, they may be looking afresh at the kind of cars they want to go for, what with physical distancing and other measures coming to stay in the new normal. A rising demand for entry-level and used cars could be the next big thing to happen in the automobile sector.

Industry experts believe that lockdown norms like physical distancing and more importantly, the threat of contracting the virus, would have people rethink on use of public transport and shared mobility, and opt for personal mobility as a long term option. Besides, two-wheeler users are also waiting round the corner to upgrade and graduate to an entry-level or used cars.

In such a scenario, auto experts believe that there will be an increase in demand for entry-level cars and even used cars. “The auto industry has suffered the most due to the coronavirus pandemic and the eventual lockdown. Our sales that used to be around 370 per month have come down by 50 per cent to 150 units. However, now that we have opened up our sales outlets, we are seeing that the number of enquiries for entry-level cars with low price point has definitely picked up and that segment will dominate the near future as well,” said Saral Talwar, executive director, Talwar Group and chairman of Federation of Automobile Dealers Associations (FADA), Telangana.

Rajender, an IT employee, who has always preferred the metro is now looking at buying his own vehicle. “I have always preferred public transport as it does not put much strain. However, this pandemic has changed my perspective as now I feel having a healthy body is more important and a personal vehicle reduces the chances of contracting the virus. I am looking to buy a very basic car which fulfills my daily commute needs,” he said.

Speaking on the need for personal mobility, Tata Motors Limited spokesperson told Telangana Today that the coronavirus pandemic has brought about a significant change in the perspective regarding transportation usage in the minds of consumers. Due to its impact and the implication of strict physical distancing norms, we anticipate that there will be a considerable decrease in the use of public transport and shared mobility. The demand for personal mobility will increase due to the customer’s need to ensure personal safety.

Not only entry-level cars, many customers are also looking at buying used cars or second-hand cars as the pricing is lower and also it serves the purpose of having a personal mobility in place.
Right Cars India CEO Manideep Katepalli said, “With the current situation people have realised that they would need a safe mode of transport for their families to commute. With the current liquidity situation and finding a solution to the current problem of commuting safely, people are fast adapting to the concept of purchasing used cars.”

A recent study by Spinny — a full stack used car platform that has sold 300 cars in two weeks of the lockdown 4.0, Hyderabad contributes to about 35 per cent of its sales, which shows the demand for used cars is also growing in the price conscious market.

Loan offerings

The price range of entry-level cars is anywhere between Rs 2.92 lakh to Rs 6.9 lakh and if we take an average interest rate of 8 per cent on the minimum and maximum amount then the EMI can range between Rs 9,150 to Rs 21,662 to be repaid in three years period. Many automakers are offering flexible financing schemes not only for new cars but also used car space. Some automakers are offering loan three-month moratorium schemes to facilitate buyers facing liquidity crunch.


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