carandbike had exclusive access to the fifth edition of the Indian Blue Book (IBB) and it has revealed that India's used car industry will witness a volume growth of 12.7 per cent by Financial Year 2026-27. Furthermore, the industry, which has been valued at $23 billion, Rs. 1,83,251 crore approximately, during the last fiscal year, is expected to grow and expand at a CAGR of 19.5 per cent. The IBB report states that India is likely to see a significant shift in the used car market over the next decade, with buyers evolving and becoming more informed.
Also Read: Exclusive: Hatchbacks Lead In Used Car Sales, As Per IBB Report FY2021-22
According to the FY2022 IBB report, consumer research has highlighted the emerging preference for personal mobility amongst consumers, especially in the aftermath of the pandemic. This has gotten further traction through the acceptance of buying used cars digitally. Purchasing a used car is fast becoming the new normal across the world.
India's used car market would grow to 1.9 times new car volumes over the next 4-5 years.
In FY2022, similar to the previous year, around 4.4 million used cars were sold in India, compared to 3.1 million new cars (as per data provided by SIAM India). This means that the new car to used car ratio stood at 1:1.4 in FY 2021-22. While this massive difference can be attributed to the constraints in the supply of new vehicles caused by the global shortage of electronic components, nonetheless, it is expected that the used car market would grow to 1.9 times new car volumes over the next 4-5 years. In fact, by FY2026-2027 India's used-car market is expected to touch sales of up to 8 million units.
Also Read: Exclusive: 15 Per Cent Of Used Car Buyers Are Women, Says IBB Report FY2021-22
Furthermore, it's projected that the global used-car industry is likely to be worth $1.52 trillion by FY2026-2027, growing at a CAGR of 5.7 per cent. In only five years, from FY2021-2022 to FY2026-2027, the global adoption of long-term online platforms for used car sales will significantly alter the growth of the used-car industry.
Offline sales have accounted for the major volume share of 75 per cent in FY2021-2022.
The IBB report states that with regard to the used car business, the COVID19 pandemic has acted as a catalyst. On the one hand, the pandemic has caused disruption of sorts. While on the other hand, it has also instigated new thinking as more and more consumers are fancying private conveyance to ensure personal wellbeing. Given the fact that offline sales have accounted for the major volume share of 75 per cent in FY2021-2022, the buyer's fondness for the conventional mode of buying cannot be undervalued.
