Some startups have made the life of used car buyers easy by offering them genuine prices based on artificial intelligence (AI). The startups have injected transparency in the second-hand automobile market, which otherwise was known for bargaining power between the buyers and sellers.
The startups have not only worked as catalysts behind increased sales reinvigorating the sector but also as change agents for the used vehicles in the global market.
"The startups named Droom Technology, CarDekho and Cars24's have done wonders in the automobile car market by injecting transparency in pricing, which ultimately has boosted second-hand car sales in India and abroad," said Aksah Srivastava, who served the automobile sector for a long year in India and GCC countries.
"The startups have built trust among the buyers. They are in an expansion mode, as CarDekho has entered the Philippines market and Droom is partnering with Toyota Tsusho, a Japanese trading house. Toyota Tsusho is also a major investor involved in developing used car markets in emerging economies," he said.
The online platform of Cars24's has been successful in building trust among car buyers by standardising the prices of used cars with the help of Artificial Intelligence (AI).
"Earlier, every used car buyer had doubts about the prices of the vehicles. But Cars24's online portal has ruled out any misinformation about a car with the help of Artificial Intelligence (AI), which minutely analyses the performance of the vehicles and gives report in a few minutes," said Srivastava.
The startup claims to have 300-point inspections performed on vehicles based on the picture of the auto and the engine sounds. The system can determine the price within some seconds.
Artificial intelligence helps quick history search of the vehicles when owners bring them to sell used cars.
"These startups have fuelled a renaissance in India's used car market. Sales of pre-owned cars are projected to reach 7.1 million units in the 2024 fiscal year, Indian Blue Book predicts, up from 4.2 million in fiscal 2019. Used vehicles outsold new autos by 50% in fiscal 2019, but that margin is expected to approach 100 per cent in fiscal 2024," said a Nekkie Asia report.
The Nekkie Asia report cited an investor who said, "Cars24 has a strong competitive advantage because of its broad product lineup and the depth of its data science technology. The company, founded in 2015, is now valued at $3.3 billion, according to CB Insights."
"CarDekho, a direct domestic competitor that fields large brick-and-mortar dealerships, uses its own AI system to set prices. It also has achieved unicorn status -- a startup worth more than $1 billion... Droom Technology, which sells new and used vehicles online, also uses AI analysis. Last year, the company applied for an initial public offering and expected to raise as much as INR 30 billion, filings with the Securities and Exchange Board of India show," said the report.
According to the report, some of these startups have teamed up to expand services in Southeast Asia and the Middle East, and competition is expected to intensify.
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