Bangalore, Jan 15, 2008

Tata Nano, the world’s cheapest car, has not only created ripples in the new car market but also impacted prices in the used car market, industry sources said.

The most affected cars in the used car segment would be Maruti 800, 4-6-year-old models of Hyundai Santro, Tata Indica and old Fiats, said Pankaj Patel, vice-president of a car portal carazoo.com.

Patel said prices of the base model of Maruti 800 in the used vehicle market would decline by 30-35%, as buyers might compare these cars with the Tata’s Rs 1 lakh car as both comes under entry level small car segment. He said even other

small cars belonging to older models would have downward price pressure with a possible decline of 10-15%.

Patel said the selling pressure would increase on the owners of 5 or 6-year-old Maruti 800 as they would try to sell their product at a premium before Nano hits the road.

In India, the ratio of new car sales versus used car stands at 1:1, with more than two thirds of the volumes coming from small car segment, where Maruti is the dominant player.

Farooq of Citizen Cars in Bangalore agreed that the prospective buyers of used small cars have now started severe price bargaining after Tata announced the Rs 1 lakh car.

However, Santhosh Olety of Olety Carz Pvt Ltd said it was too premature to talk about the impact. He said Tata's Nano would primarily attract customers who are planning to upgrade from two-wheeler to four-wheeler. “To certain extent, it would also affect Maruti 800 sales in the second-hand car segment but not the sales of other small cars,” he added.