With second hand cars/jeeps accounting for around a seventh of the total demand for such vehicles in 2001-02, it's hardly surprising that auto-giant Maruti Udyog has gone in for a used-car business, True Value.
According to the National Council of Applied Economic Research's The Great Indian Market, based on the results of an all-India survey of 300,000 households, when it comes to scooters also, a seventh of demand is for used vehicles.
In the case of motorcycles, just around a tenth of those purchased in 2001-02 were second-hand. For refrigerators, washing machines or regular-sized colour TVs, however, the second-hand demand is much lower, around 3-4 per cent.
There is, naturally, a much higher demand for used vehicles in lower income groups, and, according to the NCAER, close to a fifth of all purchases of two-wheelers by households earning less than Rs 90,000 per annum in 2001-02 were second hand while the figure was a mere 4 per cent in the case of households earning over Rs 300,000 per annum.
As a result, around two-thirds of second hand two-wheelers bought in 2001-02 were bought by households which had an annual income of under Rs 90,000 per annum.
The highest proportion of cars, 40 per cent of the total, however, was bought by households with an annual income between Rs 90,000 and Rs 135,000 per annum.
Households' purchase patterns differ dramatically across rural and urban areas.
While under 14 per cent of urban households in the category of those earning below Rs 90,000 per annum bought second-hand two-wheelers in 2001-02, the figure was nearly 20 per cent for their rural counterparts.
For cars, not surprisingly, just five per cent of rural households earning under Rs 90,000 per annum bought used cars compared to over 16 per cent in the case of their urban counterparts.
In the case of refrigerators, close to 8 per cent of urban households in the sub-Rs 90,000 category bought used machines as compared to under three per cent in rural areas.
The study also estimates second hand purchases according to the occupation of the head of the family, and found that cultivator households bought the largest proportion of used cars and scooters at the all-India level -- 26 per cent of their scooter purchases in 2001-02 were second hand.
While the average price of a new car was Rs 215,000 in 2001-02, the average price paid for a second hand car in that year was Rs 106,000. In the case of two-wheelers, compared to an average price of Rs 35,000 for a new machine, a second hand one cost Rs 14,000.
In the case of new cars, around half those bought were financed while the figure was a lower 25 per cent in the case of two-wheelers and under 9 per cent in the case of washing machines.
