CITY AUTO INDUSTRY

A place to walk in and drive outChandigarh Car Bazaar
Car buyers never had it so good, especially those on the lookout for second hand models. With the economy showing no sign of improvement and the price war between the key players in the car segment intensifying, it is finally the consumer who is having a small laugh.
Sudarshan Singh of Yamunagar, who had come to the Sector 7 car bazaar in a bus, was hoping to drive back in Maruti 800, 1991 model, for a mere Rs 60,000. “This is the time the second hand car buyers have their catch. The prices of almost all makes have come down by one-third,” he says. “I have already taken test drives in a couple of cars and will soon decide which one to buy.”
A majority of the 25 dealers in the car bazaar which operates only on Sundays are of the view that the cut in the prices of new cars has had a direct effect on the second hand car market. Every Sunday this market is abuzz with activity when the showrooms are closed. Over 500 spruced up cars of various makes and models are lined up in the parking lot, vying for the attention of prospective buyers who, egged on by the urge for social recognition and restrained by financial constraints, flock around them.
Chiranji Lal who has a business in Shimla had come hoping to buy a Ford Fiesta for less then Rs 2,00,000. “I can’t afford a new one and am looking for a Fiesta in good condition. Cars in this market can be bought for affordable prices.”
The dealers in the market, which has been in place since 1978, play the middleman between the seller and the buyer and are responsible for the whole transaction including the transfer of papers. “We charge two per cent commission from both the parties,” says a prominent dealer in the market. The dealers had to pay a weekly rent of Rs 200 to the Estate Office before it came under the Municipal Corporation. “The Corporation has now exempted us from paying the rent,” says another dealer.
According to the dealers, the ‘small Segment Cars’ is the most sought after brand. However, the others in demand are the Esteem, Ford Ikon, Tata Safari, Honda City-Civic, Lancer and the Skoda. Whereas the Maruti 800, 1996 and 2001 models, are priced between Rs 50,000 to 1 lakh , the Esteem 1996 VX model can be had for Rs 80,000, Skoda 2005 is available for anything between 5 to 5.75 lakh.
Sanjay Sharma and Ajay Sharma — both businessmen — were looking for a Skoda 2007 model. “We are willing to pay Rs 6 lakh provided the car is in good condition,” they said, adding that they would only buy a car with Chandigarh registration. “You can’t be sure of cars from outside the city.”
The seller is the worst affected by the slash in the prices of second hand cars. Sellers say that the resale value of cars is low. “People want to buy them cheap. Otherwise they normally prefer to buy new models,” says Ravinder Singh, a Panchkula-based businessmen.
Harvinder Singh was in the car bazaar to sell his Esteem but had not found a buyer willing to pay Rs 2 lakh. “Last Sunday also I had brought my car to the market but nobody offered the amount. I think the only way to sell it will be to further reduce the price,” he said adding, that he had booked a Mitsubishi Lancer and required money to buy it.
Car dealers point out that the drop in prices has actually caused a slump in the market. Few sellers are willing to sell their cars at throwaway prices. “People prefer to keep the cars with them rather than sell them for a mere, say Rs 60,000. Similarly, the buyers are reluctant to pay more for they feel buying a new car is a better deal than spending a fortune on a second hand car,” explains Mr Rajesh , a dealer.
One of the oldest dealers in the market, says he is able to make around 10 deals every Sunday. He says the method of the transactions in the bazaar is foolproof. To ensure that the car being sold is not a stolen one, the dealers explain that they only deal with sellers who are either known to them personally or whose identity is established. “If the seller is from outside the city we ask them to bring somebody who can stand surety for them and after verifying all the facts we make the deal,” he adds.
Buyers come from far off places like Delhi, Uttar Pradesh, Punjab, Haryana and even Rajasthan. The reason cited by the dealers is that since most of the cars sold here are from Chandigarh itself, these are generally in good condition because the roads in the city are good.
How does a buyer ensure that the car he is buying is in good condition? Bahadur Singh, a driver, who had come to the car bazaar along with his boss says, “I have come here because my boss doesn’t know much about cars. The best way is to inspect the car properly. See that its pickup is good. The engine is in proper working order and also find out whether the car has been repaired or not.
Some buyers bring mechanics with them to ensure that they are not cheated. The transactions in the market are done very fast. The buyer gets delivery of the vehicle the same day. However, the complete transfer of papers and other formalities may take up to 10 days. If the car being sold is from outside the city, then the seller is required to get a No Objection Certificate (NOC) from the registration authority concerned.
Some dealers, apart from playing the middleman, also buy cars through newspaper advertisements and then display these in the bazaar. “This involves a lot of risk since the prices of these cars are generally high and it becomes difficult to get buyers for them,” says a dealer. “Moreover, we have to spend money on doing up the car before it can be sold,” he adds.
The dealers issue to the buyer a delivery letter on the day of the transaction which means that from that day onwards the dealer is accountable for any fraud detected thereafter.
The dealers opine that business is never good in the months of March and April. “Buyers of second hand cars include farmers and employees. Where as the former are busy with the crops, the latter have to spend money on the admission of their children during these months”.
Dealers also attribute the slump in the market to the easy financing schemes available. People prefer to buy new cars since credit is easily available. The dealers have formed this association to ensure their credibility. The transactions in the bazaar are generally fair but whenever there is any fraud it is the dealer who suffers.