The Nano effect : Used car prices down by 35%
First Nano is not sold yet and it has already disrupted the pricing of used cars. Car dealers across the country have cut down the price by 35% to match the Tata Nano price. The ranges of cars affected are newer mid-sized and smaller cars to 5-year-old sedans.
5-year-old versions of Ford Ikon, Maruti Esteem, Opel Corsa and Fiat Sienna are priced around 1 lakh just to match the Nano price. This 1 lakh price is for the base version of Nano. As per the reports an AC version will cost around 1.4 lakh.
Used car dealer’s logic is simple: When you are getting a high-end sedan for the same price why would you go for Nano? I agree. I would not. But, this is more like who affects who and who gets affected the most. There is saying that buy used – if you really want to save costs.
If the used car prices are down to match with Nano the business in general will be affected but the volumes will increase. Nano, which do not have any other segment to compete with, will suddenly have a competition from the used car market. This might affect its sales but people might still go for Nano for the new car affect.
Used car market is suffering a poor financing scenario. This might actually play into the hands of Tata Nano. This really is a precarious situation for both Nano and the used car market. There will be winners from this tussle but the competition will be fierce.
Both the used cars and Nano has a common monster to deal with – our good old recession.
How much would a second hand Nano cost?