The Economic Times(ET) interviewed the CEO of Kuwy, Mr B. Ganesh Kumar about the various aspects of cars. The below FAQs throw light on the trend in the automobile industry in India, best-suited cars for different kinds of requirements and other general car queries posted to Mr Ganesh.
If we are on the verge of buying a car and we are in a fog about what might be the automobile trend in India, this blog is for you. It consists of almost all the answers to questions that we are irresolute about.
Q.1 What is the trend in the automobile industry in India?
Ans: India’s automobile industry is ranked 4th globally, preceded by Japan, China and the USA. We’ve come a long way as we were standing in the 10th position a few years back. More importantly, all the manufacturing happens inside the country as a part of “Make in India”. Cars are a crucial source of commutation and they come under personal mobility. India sells around 35 Lakh cars per year(approx) that are new and 50 Lakh(approx) used cars per annum. This high number is due to the preference for a personal vehicle rather than to use a mode of public transport. Moreover, the Indian car market has just started to bloom and is soon predicted to rise exponentially in the forthcoming years.
Due to covid, the sale of new cars declined and the used car industry picked up and is still high in demand. In a nutshell, the automobile industry is at its peak in India.
Q2. What is the best choice of car for a middle-class family?
Ans: There are a variety of cars to choose from namely, hatchbacks, sedans, SUVs and MUVs. Hatchback cars can accommodate 1+3 members ( 1 driver plus 3 other members) and can be opted for a budget of 5 Lakhs. It can be purchased for daily usage such as commuting for official work.
For sedans, the accommodation remains the same but has an added boot space for luggage. This type of car is a good choice if the budget ranges from 5-10 Lakhs. The purpose of purchase is similar to that of hatchback cars.
SUVs or Sports utility vehicles and MUVs or Multi Utility Vehicles can be bought if our budget is from 10-20 Lakhs. They’re used for long drives and to carry a huge family.
On the other hand, used cars are purely dependent on the budget and Maruti ranks top on the most number of used cars sold.
Q3. For beginners and the middle class, are new cars or used cars better?
Ans:
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Used Cars |
Old Cars |
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Can be purchased for a price of 1 and a Half Lakhs |
Can be purchased for a price of 5 Lakhs |
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Purchased for a specific purpose. |
Can be purchased for a specific purpose or to maintain social status. |
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Preferred by the middle class and can be apt for amateur car drivers. |
Preferred by those who have a stable finance flow. |
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Most of the purchase happens via cash as finance for used cars are hard to get. |
80% of the purchase is through finance and only 20% happens through cash. |
Q4: What are the things to keep in mind before buying a car?
Ans:
- The budget of the car.
- Purpose of the car and selection of the type of car that is most suited( such as hatchback).
- A new car after it leaves the showroom loses 25% of its original value and becomes a used car and hence are depreciated asset.
- Used cars are better for beginners.
Q5: What is the best time to buy cars?
Ans: The new car markets give the best offers from August to October as most festivals fall during that period. So, it is best to buy a car at that time.
Q6: People buy cars and collaborate with Ola or Uber to earn their living. What is the best type of car for them?
Ans: News cars are a better option as there are many loan options for new cars. Moreover, as the vehicle is used daily, the warranty benefits can be availed and they last up to three years. Used cars may require a lot of maintenance and services as far as the taxi sector is concerned.
Q7: Are loans or ready cash better to buy cars?
Ans: Loans have become a trend these days. New cars are mostly bought through loans as the rate of interest is very low. The track record of a car loan can be useful when applying for a house loan. Obtaining a car loan is quite simple for a salaried profile due to the income tax returns and can be quite complex for a business profile. On the contrary, used cars are mostly bought using cash as availing of a loan for used cars is difficult. Only used cars are depreciated assets and opting loan for them might not be necessary.
Q8: Are used cars or new cars better when opting for luxury cars?
Ans: Cars with a price of more than 20 Lakhs come under luxury cars. Despite the low sale of luxury cars, the used car market of luxury cars is picking up. This is because the waiting period for a luxury car can be up to 3 years and it is expensive.
Hoping that this blog mitigates most of the confusion. If you’re looking to make a used car purchase or take a loan for your car, Kuwy is your destination. Happy and fun learning!
