Driven by online tech platforms, the car services, and repairs market is expected to reach $25 billion by 2030 from $8 billion in 2020 (growing at a CAGR of 12 percent) in the country, a new report showed on Monday.
The share of the online segment is also expected to increase from 1 percent in CY20 to 15 percent by CY30, as online tech platforms accelerate the focus on digitizing the entire journey of car ownership right from car search, car purchase, car finance, and car insurance to sales in India.
The personal vehicle market has seen an accelerated growth trajectory post-Covid in the last 12 months, according to the report by Bengaluru-based market research firm RedSeer.
The sales of passenger vehicles have recovered to 140 percent in Q1 CY21 compared to Q1 CY20.
This increasing demand for passenger vehicles is leading to the growth of used cars.
“Currently, the used-to-new car sales ratio is 38 percent lower than the global average which means there is a significant headroom for growth,” the report noted.
With innovative ideas disrupting the sector, India’s used car market is bound to see significant growth in the coming years.
“The growth in passenger vehicles is driven by the limited availability of public transport post-Covid and increased safety and hygiene concerns leading to a shift from shared mobility solutions,” the report mentioned.
The study showed that the new-age platforms which are focusing on digitizing a customer’s entire journey see a higher NPS when compared to offline channels.
“Further, as the digital adoption grows especially in smaller towns and cities, this trend will continue to grow further”.
The Indian car services and repairs market is currently quite fragmented, but tech platforms are building out quality and affordable solutions in this segment by offering services such as doorstep pick-up and drop low-cost service and post-service warranty to customers.
Tech platforms are also providing service workshops with genuine and affordable spare parts, tech-led demand generation, and efficient logistics support resulting in higher margin and increase in footfall, the report mentioned.