Mumbai: The impending launch of the world’s cheapest car, the Tata Nano, has hit both demand and prices in India’s second-hand vehicle market, a report said Wednesday.
Dealers in Mumbai said prices had fallen by 15 to 20%, particularly for many smaller used cars like the Maruti 800, Maruti Alto and Hyundai Santro, according to the Business Standard newspaper.
Those working in smaller dealerships, mainly in rural areas, fear further falls when the Nano goes on sale, it added.
The Nano — a sporty, jellybean-shaped car that has a price tag of just Rs100,000 ($2,000 dollars) for the basic model — is to be launched next Monday and is being marketed as the affordable car for millions of Indians.
It will appear in car showrooms from April.
The director of one of Mumbai’s largest used-car dealers, Fazulbhoy Motors, was quoted as saying that the drop in demand began when Tata Motors announced the Nano’s launch date.
“People are postponing purchases and there has been a lull in the market ever since,” said Arif Fazulbhoy.
The financial daily said the a 2007-made Maruti 800, which previously retailed at 145,000 rupees, was now selling for 125,000 rupees while a 2007 Maruti Zen Estilo was now 40,000 rupees cheaper at 260,000 rupees.
But Shubhabrata Saha, chief executive of Mahindra First Choice Wheels, said the launch of the Nano would largely impact smaller dealerships, which make up 80% of the country’s second-hand vehicle sector.