The Indian used car market was valued at $23 billion in FY2021-2022. The IBB 2022 report indicates that one of the key factors in determining the growth will be a steep rise in online platforms. What is also currently helping the growth of used car sales is the semi-conductor shortage, which is hampering the manufacturing of new cars. Plus, the coming of COVID-19 pandemic, personal mobility is seeing significant growth too. The Indian used car market is expected to have a CAGR of 19.5 per cent by value and 12.7 per cent by volume between now and FY2027.
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(Digitalisation is an important factor in growth of used cars)
"The used car industry is going through a purple patch, with strong demand expected to continue for the foreseeable future." To capitalise on this massive opportunity, organised players must drive trust, competitive pricing, customer experience, and varied inventory offerings," said Ashutosh Pandey, MD & CEO, Mahindra First Choice Wheels.
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Some of the key factors which are driving the growth of used car ownership include – increased disposable income, better finance options, low vehicle ownership density, reduced ownership duration and organised investment. With India having one of the fastest growing automobile industries, the sales of new cars as well as used cars are growing in parallel to each other, with used cars having a lower cost.
Along with the increase of online portals for used cars, the Indian Blue Book also says that gaining consumer trust on online and offline buying journey is critical to a good buying experience which in turn will lead to better sales. Consumer research has highlighted the emerging preference for personal mobility amongst consumers, especially in the aftermath of the pandemic. This has received further traction through the acceptance of buying used cars digitally. Purchasing a used car is fast becoming the new normal across the world.
