Auto Tech

Surge in the used car market sets signals the growth story for car service segment


India sold about 4.4 million used cars in FY20 compared to 2.7 million new cars. Also, pre-owned car sales are currently 1.5 times more than new car sales, the gap is set to increase in the coming years. Besides, the used car market is also anticipated to cross 50 billion by 2026.

Moreover, Demand for 4-wheeler would continue to build up and will primarily be driven by a multitude of factors such as the virus spread concerns, Tier II and Tier III cities will be contributing in a big way, owing to an increase and easy financing options becoming available, greater need for mobility and as well as the desire to own a car, which perhaps continues to be one of the biggest drivers still.

Another underlying factor of the pre-owned cars in the country is mainly driven by the surging consumer focus on high-quality vehicles that are available at affordable prices and the increasing preference for imported cars. Moreover, the improved quality of used cars after undergoing extensive servicing by the dealers is creating a new perception and confidence among consumers.


Furthermore, the highly competitive used car market is influencing the growth of the automotive servicing industry which is anticipated to be worth 32 Million USD by the year end. Consolidation, scale and phygital solutions are the driving forces for the companies operating in the automotive servicing space.

Also, in Tier 2 and Tier 3 cities, as the demand for used cars is growing, the demands of such multi-brand car service workshops are also increasing. Besides most used car buyers in tier 2 and tier 3 are also skeptical to go to bigger showrooms. Hence to fill in this space and cater to the rising demand altogether an interesting new segment which is– Multi brand car service market- has emerged where start-ups like Vehicle Care are at the fore, fast picking– working and organizing the market. Currently the market is highly unorganized and is divided into three parts: upper level, middle level and lower level.

Cutting across the above three spectrums, the future of the after-sales car service market in India has seen a gear shift in the last few years. Tapping all categories of customers, the start-ups operating in the Multi brand car service niche are seeing an upward growth trend in popularity and acceptance, especially among millennial. Synergizing factors such as excellence, ease of use and the sheer convenience is what is letting these start-ups have a competitive advantage and they are riding high on these elements to grow more.

On the whole, tech driven multi brand car service platforms in the past years have been phenomenal and even the future is promising as data analysts forecast that – Auto servicing sector is expected to be worth it by 2025.

‘Before the trend of the multi-brands car service, a car user typically has two options in case of their car servicing needs; either drive into a company-mandated service Centre or search for a nearby local garage.

An authorized dealership is known to be heavy on the pocket as it entails compulsory replacements. The only advantage of an authorized workshop is the peace of mind or rather more of a deception. And making use of the local garage had its own drawbacks as it is light on the pocket but not good for the car in the long run. These unorganized local garages, which subsist on a tiny budget, compromise when it comes to offering quality service, spare parts and maintaining transparency with the customer.

Multi-brands car service is filling in this space by combining the better of the two worlds. For example, multi-brands car service centers offer services for many car brands, and the customers also get a warranty on car services along with genuine OEM and OES flexible spare parts. Complete transparency and liability with all charges upfront is another benefit.

Also, as the used car market seems promising with a 15% growth percentage so parallelly there is an expectation from the Used Car Service. It is not surprising that Vehicle Care has witnessed an increase in demand in Tier 2/ Tier 3 cities as many people are shifting from 2 wheelers to 4 wheelers. Talking of numbers, presently on an average Vehicle Care is catering to per month orders of over 2000 four wheelers and approximately 800 two wheelers’ Said Mr. Arvind Verma, Cofounder, VehicleCare.

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