Popular Vehicles & Services , a prominent player in the automotive retail sector, has reported that used car prices are experiencing a slower decline compared to new vehicles following recent GST rate reductions on automobiles. This insight comes from Naveen Philip, the Managing Director of Popular Vehicles & Services, shedding light on the dynamics of the automotive market in response to recent tax changes.

Used Car Price Trends

According to Philip, used cars are witnessing approximately 50% to 60% of the price reduction observed in new cars. He explained that the slower adjustment in used car prices is attributed to individual vehicle factors such as mileage, which require more time for market realignment.

Impact on Market Segments

Despite the increased affordability of new cars due to GST cuts, Philip does not anticipate a significant migration from the used car segment. He pointed to India's current low car penetration rate of 20-22 cars per 1,000 people as a factor supporting the continued demand for both new and used vehicles.

Growth Drivers

Philip identified two key drivers fueling growth in the automotive sector:

1. GST price reductions
2. RBI's interest rate cuts

These factors are expected to stimulate demand across both new and used car markets.

Market Response

Initial market response has been positive, with Popular Vehicles reporting:

• Increased showroom inquiries
• Higher booking rates

However, Philip cautioned that the sustained retail impact would require monitoring through early October to gauge the long-term effects of these changes.

Stock Performance

Popular Vehicles' stock reflected a slight downturn amidst these market developments. The company's shares closed at ₹146.50 on the NSE, marking a 1.09% decrease.

As the automotive market adjusts to these new dynamics, industry observers will be closely watching how the interplay between new and used car prices evolves, and whether the initial positive response translates into sustained growth for both segments of the market.

Popular Vehicles & Services , a prominent player in the automotive retail sector, has announced its strategic expansion into the Telangana market through a partnership with Maruti Suzuki India Limited. This move marks a significant step in the company's growth trajectory and strengthens its presence in the southern region of India.

Partnership Details

Popular Vehicles & Services has described Maruti Suzuki as its "long-standing OEM partner" in this expansion initiative. This characterization suggests a well-established and trusted relationship between the two companies, which is now being leveraged for mutual growth in a new market.

Market Expansion

The entry into Telangana represents a calculated move by Popular Vehicles & Services to tap into one of India's rapidly growing states. Telangana, with its capital Hyderabad, has been a hub of economic activity and technological advancement, potentially offering a lucrative market for automotive sales and services.

Strategic Implications

Geographical Diversification

This expansion allows Popular Vehicles & Services to diversify its geographical presence, potentially reducing risks associated with regional market fluctuations.

Brand Association

The partnership with Maruti Suzuki, India's largest passenger vehicle manufacturer, could enhance Popular Vehicles & Services' brand value and customer trust in the new market.

Market Reach

Leveraging Maruti Suzuki's popular product lineup and brand recognition could help Popular Vehicles & Services quickly establish a foothold in Telangana's automotive retail sector.

Potential for Growth

The expansion opens up new revenue streams and growth opportunities for Popular Vehicles & Services in a state known for its economic dynamism.

This strategic move by Popular Vehicles & Services underscores the company's ambition to grow its footprint and capitalize on emerging market opportunities. As the partnership unfolds, it will be interesting to observe how this expansion impacts the company's overall performance and market position in the competitive automotive retail landscape.