Used two-wheeler sales zoom
Sales of pre-owned twowheelers in India grew more than the new ones. Factors such as demonetisation and a transition from BS III to BS IV emission norms have impacted the new two-wheeler space, while the used segment remained immune to the same. According to a research, between 2010 and 2015, the used segment has seen a growth rate of 17.9 per cent in terms of revenue.
According to second-hand automobile marketplace Droom, in 2016-17, sales growth rate of two-wheelers stood at 112 per cent compared with the previous year.
Sandeep Aggarwal, founder and chief executive of Droom, said the online platform has sold 21,300 units in 2016-17 compared with 10,020 units in 2015-16. In April 2017, it grew 50 per cent year-on-year at 2,400 units.
Droom said 59 per cent of all queries and online sales comprised two-wheelers (41 per cent bikes and 26 per cent scooters).
Of the total 1.2 lakh transactions on its platform in the last two years, valued at ~1,800 crore, two-wheelers contributed around ~500 crore, Aggarwal said.
Another online platform Bikewale, a part of Mumbaibased auto portal CarTrade, has seen a 100 per cent yearon-year growth in sales since December 2016, founder and CEO of Cartrade.com Vinay Sanghi said.
Offline dealers, who are mostly unorganised, too, said they had not seen any demand slowdown for used two-wheelers since demonetisation. “The demand for used two-wheelers has seen a consistent increase in the last two years. Models such as the Honda Activa, Aviator, TVS Jupiter, Bajaj Pulsar and Discover are evergreen models are always in demand. The availability of easy finance options and more women opting for personal transport are key growth drivers,” said an Ahmedabadbased dealer of used twowheelers who operates two showrooms in the city.
On the other hand, a sharp drop in two-wheeler sales volume in the ensuing months of demonetisation pared back the industry’s volume growth to 7 per cent in 2016-17 from 16 per cent during the April-October period, said Subrata Ray, group head (corporate sector ratings) of Icra.
YS Guleria, vice-president — sales and marketing — Honda Motorcycle and Scooter India (HMSI), said, “Our experience shows that the preowned industry is evolving very fast. The replacement cycle for two-wheelers has come down to three to five years in a decade from seven to eight years. With a shrinking replacement cycle, Honda witnesses an immense potential in the pre-owned retails and we are aggressively scaling up this business. We aim to increase the Best Deal count to 200 outlets by the end of 20117-18.”
HMSI has introduced the concept of certified pre-owned outlets, Best Deal, which allows the company to create more touch points to interact with customers and the tap the potential of the pre-owned space.
Honda’s Best Deal network covers 117 cities across 21 states. The company added 52 per cent of its network in the last two financial years. It serves over 70,000 pre-owned twowheeler customers. Pre-owned sales through Best Deal outlets grew 23 per cent in 2016-17
Ken Research’s report on ‘India Used Two Wheeler Industry’ stated, “The used two-wheeler market in India has witnessed an unparalleled growth over the period 20102015. It has seen an unprecedented compounded annual growth rate (CAGR) of 17.9 per cent during 2010-2015 in terms of revenue.”
It attributed the growth to rising aspirations of consumers, frequent launches of two-wheelers and availability of easy financing options. Also, the reduction in the ownership period of twowheelers has also been an important growth driver.
The used two-wheeler market, currently dominated by offline players, including selfappointed dealers, roadside garage mechanics, small brokers and two-wheeler owners, is also witnessing a structural shift. Online classifieds and auto portals have been inducing a shift to transactions, which are conducted without the involvement of intermediaries. Pune-based player Bikers Highway was the first to disrupt the online space. Later in 2014, e-tailers such as Droom and CredR entered the market.