Too many sellers, few buyers for used diesel cars

In the capital’s biggest second-hand car market at Arya Samaj Road, Karol Bagh car owners are lining up to sell their older diesel cars and there are no takers. Used car dealers and individual customers are both shying away.

“There are few takers today even for cars like Innova, Scorpio, Duster and diesel variants of premium segment cars (Audi, BMW, Mercedes). The worst affected being cars that are six years and older,” says Ravi Batra of Milan Motors.

Terming the move of National Green Tribunal (NGT) to ban all diesel vehicles older than 10 years in Delhi as anti-middle class, second-hand car dealers and car owners say the ban will hit them.

“Due to the oversupply of used cars in the market and reluctance on the part of customers to buy a diesel car, the prices of these cars are bound to move downwards, and also our profit,” says Ashok Arora of Milan Motors.

“One year back, a second-hand 2010-model Toyota Innova diesel Multi Purpose Vehicle (MPV) used to sell at Rs 10 lakh here. Recently I sold the 2013 model for Rs 8.3 lakh. So the ban’s effect has already started,” Arora adds.

The Karol Bagh used car market caters not only to the Delhi’s customers. People from all over the country come there to sell and buy second-hand cars.

And the capital’s bane seems to be a boon for people from neighbouring cities who have been making a dash to Delhi to make the most out of the NGT order.

“Dozens of diesel cars are being sold in cities like Agra and Lucknow. Decade-old SUV's, hatchbacks and sedans are being sold for anything between Rs 40,000 to about Rs 2.5 lakhs,” says Harish of Dilori Motors.

Since the owners of old diesel vehicles in Delhi are in no position to use them, thanks to the NGT ban, they have no other option but to sell them in other states.

Aditya Gupta of Carnation, a Karol Bagh dealer in used cars, says: “It's a great time for consumers from outside Delhi who prefer diesel vehicles for better pick-up and mileage over the petrol variants. Before the NGT order, we sold perhaps a dozen cars a month. But the day after the NGT order, we have been flooded with queries on decade-old diesel variants, especially those which are registered in Delhi and have now been banned by the tribunal.”

“Thankfully, the ban is currently being placed only in Delhi and NCR. We have the option of selling the old diesel cars to customers from other cities. But if the ban covers the entire country it would be a harsh blow to the used car market,” Gupta adds.

Second-hand car dealers are strategising their business by selling diesel cars outside Delhi and putting their money on petrol cars. However, for customers who now drive diesel cars the NGT order looks particularly harsh as the car which they had bought at a premium and has been giving them good service will now have to be sold off dirt cheap.

“I had bought my Maruti Zen in 2000. It was still giving good service and had been given a fitness certificate also. But fearing the new order I had to send it to the scrapyard. Seeing my beloved car getting cut into pieces is heartbreaking,” says Ravi.

For a middle-class car user, buying a diesel car is more economical than a petrol one as the mileage is better – and despite the narrowing difference in prices, diesel is still a cheaper fuel.

According to second-hand car dealers, till about a year back 60 per cent of cars they were selling were diesel, 30 per cent petrol and 10 per cent CNG. But now only 15 to 20 per cent of the cars they sell are diesel.

The NGT order to deregister cars over 10 years old comes after failure of Delhi government and police to implement a similar order last year. Around 3,000 vehicles were impounded, but they resurfaced later.

Questioning the ‘futility’ of such a move, some car dealers think that NGT should have targeted other forms of pollution.

S K Jain of Milan Motors argues that only a small percentage of vehicles in NCR run on diesel, while in Europe the proportion is much higher. In his understanding, there is a large proportion of cars over 10 years old still on the roads in Europe. The NGT should find out how it’s done in Europe, he suggests.