Demand for used-cars drops but high prices aren’t budging

Vehicle sales in Bhutan dropped last year

Used-car prices appear to be stuck in high gear, despite slowing consumer demand.

Last month, sales of used cars less than 10 years old were down 27% compared with earlier years, according to second-hand car brokers, which track dealership prices across the country.

However, vehicle sales in Bhutan dropped last year, but the number still passed the healthy revenue generator for second-hand car brokers.

Vehicle showrooms sold more than 70-80 new cars. Although buyers spent more on vehicles, showrooms had to prop up sales with record discounts, according to the vehicle sold report 2021.

Following a long trend, around 70% of new vehicles sold last year were Creta, Alto, Swift, and I-20 Active. Creta and Celero were the highest sales in the market and sold around 80% of last year.

Other car sales fell once again, by 5-10%, according to sales reports, including Santro, Tucson, and Sonata among others. 

“Already existing cars were sold by brokers with actual price and customers are reluctant to buy new ones,” said one of the sales executives adding that cars like Celero and Alto are among those which are in most showrooms but cannot be sold as per price.

Sales at second-hand car brokers fell around 50% last year. Around 60 second-hand cars were sold by the two brokers in Thimphu, last year.

The second car broker predicted that more than half the new vehicles sold last year were Creta, passing a 50% market share for the first time. And the second-hand car including Alto, Santro, and MarutiVan dropped to 20%.

 “People prefer second-hand cars with these brands, we are selling these cars at low rates as per the model and conditions,” said a dealer of second cars.

One of the brokers said that last year’s sales numbers defied the odds compared to past years, especially because new vehicle rates and prices squeezed some buyers. “People tend to buy second-hand cars in good condition,” he said.

He added that most of the cars they get are from people who pursue studies abroad while some want to buy new cars. “Around 30-35 cars were sold from my broker’s showroom last year,” he added.

The average new-vehicle sale price last year hit an estimated Nu 500,00-11,00,000 without quota and including all taxes. Setting a record, according to the price of a car, Creta and venue prices hit Nu 600,000-1.3mn with quota and Nu 900,000-1.7mn without quota including all taxes rising from 2018. Car prices averaged Nu 1,283,354 a small increase from the previous year.

Also, for the first time, Venue pickup beat the Creta in half-year sales as Venue cars were imported in September, last year.

“As prices become more attractive and more people seek to own brands like ours, the market will surely expand these rates,” one dealer said.

Meanwhile, among other cars, Creta, at a price of Nu 859,000 (showroom) for the petrol version and Nu 946,000 for the diesel version took on rivals like Mahindra Scorpio, Duster, and Nissan.

The middle and top-end petrol versions of Creta are available at Nu 957,000 and Nu 1.19mn respectively. All versions of petrol are powered by a 1.6-liter petrol engine. However, in diesel, there are two engine options: 1.4 liters and 1.6 liters.

Kinley Yonten from Thimphu