That the Rs 1 lakh car has finally arrived is good news to many a car buyer who dreamt of owning a safe mode of personalised transport. As more automobile manufacturers follow Tata and Bajaj and chip in to offer a low cost budget car, its arrival could result in a flood of pre-owned cars with fewer takers.

This could result in a cascading effect on prices of used vehicles in the budget segment, in the coming months. As Bangalore continues to see the highest vehicular growth rate amongst all cities with close to 300 new cars at the doorstep of Regional Transport Offices, this number could increase threefold when Tata Nano hits the road and affect sales of second-hand cars.

While the old horse Maruti Suzuki 800 continues to be the favourite in the budget category, its nearest competitor the Hyundai Santro too is not far behind. Will the entry of new cars at a price of a lakh of rupees eat into the volumes of pre-owned cars and bring down their market value. The responses from dealers is wait and watch, as Deccan Herald found out.

Mr Nagaraj, Senior Manager of Auto 1, a  multi-brand auto store says the entry on the Nano, may possibly affect demand for pre-owned Maruti 800 only. “It is too early to speak on its market impact visa-a-visa demand. The 800 still commands a premium for itself for those looking for a first time car, with a tight budget. Possibly an year down the line, its impact may begin to show. Issues such as road-worthiness and service are yet to be seen. A trend of people trying to sell off their small cars before the arrival of Nano to get a good value is possible” says Nagaraj.

Still preferred?

A manager in a Maruti ‘True-Value’ showroom in the city adds that the 800 is still the preferred choice for a entry car. “We continue to sell between 130-150 used cars a month. Of these, the 800 and Alto constitute a chunk. New cars at a lakh of rupees will have no impact until they hit showrooms,” he says.

Giriprakash, a  sales manager in a pre-owned showroom for Hyundai cars points out that the Nano is yet to be tested on roads. “300 new cars in the entry level segment continue to be registered. Thirty pre-owned Hyundai Santros are sold in each showroom a month. Customers prefer quality over price. The performance of the Nano will have to be seen after it completes about 20,000 to 30,000 kms on roads. Its entry will not have any affect either on demand or price of small cars at least for now,” he observes.