For those who are planning to buy a car, Zee Business has brought exclusive research that would help them plan their purchase. It will also help them understand whether they should buy a new car or go with the used ones. Further, it will help investors of the stock market understand how these developments will go on to help a particular company. Research Analyst Ashish Chaturvedi dives deep to bring this big news, which will be beneficial for car buyers.  

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Chaturvedi mentions keeping an eye on recently-listed CarTrade Technologies. “It is expected that the demand and supply of used car or second-hand car are going to surge. And there are a lot of reasons behind this increase,” he said.  

First, the auto sector around the world is grappling with the semiconductor shortage. And due to this, major auto companies have reduced their production. Because of this, availability has been reduced. So, now if you are going to buy a new car then its waiting period is too long, Chaturvedi added.  

He said that there is a minimum waiting period of 4-6 months. In fact, dealers are clearly mentioning this waiting period to the buyers, but this is actually more than that. "Because of the COVID, we have been witnessing a huge surge in the demand for personal vehicles. As there were restrictions on public transport in major cities. And people started traveling in their personal vehicles," he said

Chaturvedi asserted that second, people are also shifting towards second-hand cars because now buying a new one is getting dearer. Today, Maruti Suzuki has also informed that it is hiking car prices by 2 per cent (ex-showroom) from immediate effect. This is 3rd or 4th hike from Maruti's side. Similarly, almost all companies have increased car prices because of the manufacturing cost they are facing. Metal price has also increased. Buying a new car is more expensive, so people are switching to used cars.  

And CarTrade will get huge benefits from all this because it is the only listed company in this space. CarTrade has a variety of platforms like CarTrade, Carwale, Shri Ram Auto Mall, Car Trade Exchange. These are quite a popular platform because, at the time of its IPO, the company informed that between April-June, 2.7 crore new users are hitting their websites every month, he added.  

According to a report, 90 per cent of customers research online before buying a new car. CarTrade not only deals in used cars but also sells new cars, provides inspection, evaluation services, he stated.  

As per a report, by FY25, the used car market is expected to surpass the new car market and will witness a 15 per cent CAGR. Also, around 64 per cent of first-time buyers prefer second-hand cars. This trend is not only common in India, but in the US also. At the time of the COVID, the demand for second-hand cars has zoomed upward in the US, Chaturvedi said.  

He further mentioned that this trend is growing exponentially. In FY17, the demand for the used car was 36 lakh, against 31 lakh new cars in the same fiscal year. Again in FY19, the demand for the used car was 40 lakh, against 34 lakh new cars same fiscal year. Now in FY21, the demand for the used car reached 38 lakh, against 26 lakh new cars same fiscal year. OLX Auto registered $100 crore transactions in second-hand cars.

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Managing Editor Anil Singhvi said that the targets for this stock will have to increase to Rs 1,700 because of the growing demand. And this is great news for the companies that are involved in this business. The stock can surge to Rs 200-250, and the business outlook is looking good.