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Cannibalizing a part of car world... quite a big deal
There are many who would swear by the world of cars to spell out their anger if they see ‘Nano’ news anywhere. Nano is covered to death, from the economic to the ecological aspects of it. The funny bone in your body would start pricking about the uselessness of such news in your virgin newspaper!
But you never knew that you could make a good deal out of such effect, the Nano effect is not all that bad. In case you don't want to settle for the “cheapest car” but an “upmarket car”, yet the pocket isn't allowing you to do so, the good news has just arrived. The used car prices have gone down by about 15 to 30 percent, and even more according to latest reports.
The baby ‘Nano’ that is waiting to be launched in October this year will carry a price tag of Rs. 1.3 lakh for the base trim and higher as you go up. Much lower than many used cars. “The price of a second-hand Maruti 800 has dropped over 30 per cent since the Nano was unveiled. To give an indication, the price of a 2002 model has dropped from Rs 1.1 lakh in December to Rs 75,000 today,” said Arif Fazulbhoy, head of Mumbai?s largest car dealer, Fazulbhoy Motors told to a business daily recently.
The effect has been such that five-year old Hyundai Santro, earlier available at Rs 2 lakh and above has now dropped to Rs 1.65 lakh. The tall boy from Maruti stable WagonR is now sold at Rs 1.8 lakh, which is cheaper by Rs 33,000 after Nano walked into car market.
Maruti Suzuki Alto, which is the highest selling car in Indian market is down by Rs 25,000 and now available at Rs 1,10,000. Even the entry level sedan market has been hit with prices of Maruti Suzuki Esteem, Ford Ikon are now cheaper by Rs 40,000.
Despite the cut down on used car prices, buyers are still seem to waiting for the Nano launch, according to Fazulbhoy. And what?s affecting the used car market is an unorganized market dominating it.
But will the price fall in the used car market help them or push down the Nano fever? Dealers and analysts have come up with predictions. An analyst from Angel Broking said: “The Nano will cannibalize used–car sales by exerting more downward price pressure. The prices may go down further by 10% to 20%, after Nano is launched.”
Ankit Sharma, of Patliputra Automart India admits saying: “With the small car contributing 70 per cent of our sales, used-car dealers might have to refocus their business on high-end cars.”
However, the small cars will dominate the Indian car market for many more years. The market is expected to witness the downward trend for at least two more years. The markets is expected to stabilize after the launch of Nano, when the small car and ultra small car segments will have their own pricing levels.
