SUVs driving used car demand in India: Google report

Utility Vehicles (UV) were the most-searched used car on Google in India, taking up to 47 per cent share of all used car queries in India, according to a Google study.

UVs are also becoming the primary driver of the online used car demand in India, followed by hatchbacks at 20 per cent with the remaining being accounted for by sedans and luxury cars.

This growth in demand also matches with offline sales for sports utility vehicles (SUVs) at Mahindra First Choice, which has seen SUV sales grow from 6 per cent to 10 per cent in the past three years, it added.

''Used car consumer is highly underserved in India as the industry is characterized by a lack of formal distribution and service networks. The industry suffers from a significant trust deficit between buyers and sellers. This is also reflected in the search behaviour in India, there seems very low awareness as well as low curiosity to know about 'certification' or 'warranty' on used cars,'' said Gaurav Kapur, Industry Head for Auto vertical, Google India.

''We see a significant amount of queries for certified used cars in developed markets like the US. This probably is a clue to the direction in which the market will evolve over the years as it gets more organised,'' said Kapur.

The study was conducted by Google India in association with Mahindra First Choice Wheels. The firms analysed the search trends of used cars queries and actual market behavior to understand the used car market in India.

Indicating a growing a demand for used cars in India, the number of queries related to used cars on Google Search have grown 20 times in six years; with a 30-per cent YoY in 2014. The used car buyers are increasingly relying on the internet for their research before they arrive at final decision.

As many as eight in 10 potential used car buyers starting their research from Google search seem to be undecided about which used car to buy. Most commonly searched queries involve questions around budget, brands, fuel efficiency and ownership.

As per data available with Mahindra First Choice, the proportion of first time buyers has declined while an increase has been registered in the ''multiple car in the family'' segment.

However, the first time buyer still remains the largest category for a used car customer.

Used cars as the second vehicle in the household instead of a two-wheeler is on the rise.

''The used car market is now not only larger in size, but also growing at a rate faster than the new car market, while undergoing structural changes and getting more organised. As user understanding evolves, organised used car market is likely to see 15-20 per cent growth in the next 4-5 years,'' said Nagendra Palle, CEO of Mahindra First Choice Wheels.