The Used car marketplace in India is Segmented by using automobile type (Hatchbacks, Sedans, and sports software motors), vendor type (prepared and Unorganised), and gas type (Petrol and Diesel). The file gives the marketplace sizes and forecast in cost (USD billion) for all of the above segments.
The Indian used car market will be valued at USD 35.14 billion in 2022, and it’s far expected to reach USD 74.70 billion in 2027, registering a CAGR of 15.1% at some point in the forecast period (2022-2027).
The COVID-19 pandemic had a minimal impact on the enterprise. With the increased number of humans who prefer personal mobility and extra finance alternatives to be had within the used automobile market, the marketplace is ready to grow appreciably.
Due to the decrease in cash flow due to the pandemic, buyers are looking for alternatives to new cars, and the used car industry has high growth potential in this environment. The used car market is gaining momentum among buyers as new car sales and production have contracted due to the pandemic.
However, the used car market has developed domestically with growth in organised and semi-organized sales segments. In fiscal 2020, the used car market sold 4.4 million units, with 2.8 million new cars sold in the same year.
Standardised dealer experience, high prices, and used car financing costs can hamper the growth of the used car market. According to the new BS-VI emission standards introduced by the Indian government, the cost of technology for vehicles that meet the standards will be borne by the consumer. The corporate focus on reduced diesel production is expected to increase the demand for compact diesel vehicles in the price and mileage-sensitive Indian market.
The Used Car Market in India report covers the latest trends, impacts of COVID-19 and technological developments. The scope of the report includes segmentation by vehicle type, supplier type and fuel type. Based on vehicle type, the market is divided into hatchbacks, sedans and SUVs.
Based on the type of supplier, the market is divided into organised and unorganised markets. Based on the type of fuel, the market is divided into gasoline and diesel. For each segment, market size and forecasts were made from value (in USD billion).
Unorganised Channel is expected to maintain a prominent share in the market
The used automobile enterprise in India is at its nascent stage. The unorganised sector dominates the marketplace, wherein the scope for patron safety is on the lower side. The unorganised sales channel is classified into semi-prepared, unorganised, and client-2-consumer. The semi-prepared sellers perform from a physical store, such as a garage or a mechanical store. Then again, unorganised income takes place via agents or commissions.
Disorganised dealers gain customer trust by eliminating subjective biases toward sellers (including specific make and vehicle models) and simplifying the entire transaction. However, unorganised/independent dealers usually have a limited stock of non-certified vehicles whose warranty has expired. Although local independent dealers may have more inventory, the ease of transfer of Certificate of Registration (RC) and the reliability of these vehicles remain challenges.
OLX is a leader in this segment. In 2019, OLX collaborated with Frontier Group to launch an offline used car store (Cash my Car). Cash my Car stores are currently available in 10 cities. By 2021, OLX plans to expand its presence to 40 cities and 150 stores. Accordingly, offline retailers are expected to spur the unofficial used car sales market during the forecast period.
Growing demand for Luxurious Used vehicles to Play Key function within the market
The Indian pre-owned vehicle market is growing because of constant growth in the demand for luxurious cars. The income of used luxury vehicles created a 20% increase.
Until some years ago, it became not easy to buy a luxurious vehicle due to its high fee but, this fashion is step by step changing as purchasers can now purchase pre-owned luxurious automobiles. The market is becoming extra prepared with easy get right of entry to financing options, annual maintenance contracts, and lower entry prices. Additionally, the common age of used luxurious automobiles entering the market is between 2 and 3 years as compared to five-6 years for a mid-length or small-scale car, making them a better alternative in some instances.
According to car dealers, demand for used luxury cars is growing by around 35-40% annually as luxury car owners typically sell their car after a year or two and upgrade to a better model.
At first, the used car market attracted attention only in the metropolitan area. However, local dealers and online players have expanded the market. Interested customers in Tier 1 and Tier 2 cities can now also request and purchase these vehicles. According to Big Boy Toyz, more than 33% of pre-owned luxury car purchase requests come from outside their home country.
India’s used car market has been consolidated as the major player with the largest market share owing to its business model and growing used car retailers. Key players include OLX, Mahindra First Choice Wheels, CARS24, Maruti True Value and Hyundai H Promise. These players use various growth strategies to stabilise their position in the market.
There are various examples some of which are discussed below:
- In January 2020, Mahindra First choice Wheels invested in CarandBike.com, a famous automotive portal in India.
- In October 2019, Cars24 closed a fairness financing of around USD one hundred million from new and existing investors in collection D funding.
- In February 2019, Maruti Suzuki India re-added its authentic value logo with a new identity and blessings.