To begin, the Korean brand will seek to establish itself in larger cities.
Kia India has confirmed that a used car business will be launched in the country next year. “We are also planning to get into the used car market,” Hardeep Singh Brar, vice president and head of Marketing and Sales, Kia India, said during the OLX Autos’ used cars panel discussion. It will be the right time to start [with our used car business] in 2022, when our cars will be around three years old, especially in the larger cities.
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In 2025, the used car market is expected to be twice as large as the new car market.
The cost of a used car has increased by 5% to 10%.
In its segment, the Kia Seltos has the highest resale value.
What makes Kia want to get into the used car market?
Due to the need for personal mobility as a result of the COVID pandemic and ongoing supply shortages for manufacturing new cars, pre-owned car sales have been on the rise in the country. Kia has recognised the potential of the used car market and is now vying for a piece of the action.
“If you look at the current situation, I believe the used car market is roughly 1.4 times the new car market, and by 2025, it is expected to be nearly two times the new car market.” As a result, we see tremendous potential in this area,” Brar added.
The Seltos, Kia’s first model in India, will turn three years old in 2022, and the automaker does not want to lose customers who are looking to replace the SUV with rival brands. As a result, establishing its own used car business will aid Kia’s conquest sales. Apart from the fact that the brand will look to set up shop in larger cities to begin with, Brar didn’t reveal any other details.
However, despite its potential, the used car market is currently facing some challenges. “At the moment, the used car market’s supply is a major concern. As a result, when there is a concern about the supply of new cars, people hold on to the cars they want to trade in, which, I believe, has impacted the used car supply,” Brar said.
As a result of the demand outstripping supply, used car prices have risen. “It has actually gone up [used car prices], I would say, anywhere between five and ten percent compared to what it was before,” he added.
The Kia Seltos has a high resale value
Kia is showing signs of entering the used car market, with the Seltos being named the best resale value in its segment in a study conducted by Autocar India and OLX Autos earlier this year. The Seltos is able to command a strong resale value that is unmatched by any of its competitors in the midsize SUV segment, thanks to long waiting periods and price hikes.
I would say there are three factors [for high residual value],” Brar said when asked about the Seltos’ high residual value. One is that as the price of new cars rises, it has a direct effect on the price of used cars. The second factor is the availability of a new vehicle on the market. A long waiting period has a significant impact on the overall pricing of a used car, which is probably why we have the best residual value in the market. Finally, there’s the product itself. People seem to enjoy it [the Seltos] and are willing to pay a premium for it.