The Indian used car market was valued at USD 24. 24 billion in 2019, and it is expected to register a CAGR of 15. 12% during the forecast period (2020-2025). - Over the years, the used car market has evolved in the country, with the growth of the organized and semi-organized sector.
New York, March 25, 2020 (GLOBE NEWSWIRE) -- Reportlinker.com announces the release of the report "India Used Car Market - Growth, Trends, and Forecast (2020 - 2025)" - https://www.reportlinker.com/p05786690/?utm_source=GNW
The pre-owned car or used car market crossed the 4 million units mark in FY 2018, which states that the used car market is 1.3 times of the new car market. One of the key growth drivers of the market is the revision of the GST rate on used cars from 28% to 12-18%.
- As the Indian auto-industry is entering the BS-VI era from April 2020, the value proposition of used card can grow stronger, as new cars are expected to become expensive due to additional technology costs. Additionally, as per the MD and CEO of Mahindra First Choice Wheels (MFCW), companies gradually focusing on reducing the production of diesel cars, for instance, Maruti Suzuki’s decision to exit the diesel car segment by April 2020, is also expected to increase the demand for compact diesel cars in the used car market, unless there is a backlash against diesel cars.
- Factors, such as standardized dealership experience, fair price experience, and high financing cost for used cars, may hinder the growth of the used car market. Some of the major players dominating the market are OLX, Mahindra First Choice Wheels, Cars24, Maruti True Value, Hyundai H Promise, and others.
Key Market Trends
Organized Channel Expected to Register Higher CAGR
The organized segment in the Indian used car market is expected to witness a CAGR of 22.79%, during the forecast period.
The organized sales channel has witnessed significant growth over the last three years. This growth is driven by increased sales of used cars in metro cities and a rise in online sales platforms, such as CarDekho, Cars24, Droom, etc.
Majority of the OEMs have already entered the used car market and those who haven’t entered the used car market in the nascent stages have also entered the market during the last five years. Renault started the pre-owned car business in 2015 and Nissan had entered the business in 2017.
Significant OEMs in India, such as Maruti Suzuki, Mahindra, Hyundai and Toyota, and luxury car manufacturers, such as BMW, Audi, and JLR, have their used car network.
Majority of these players have witnessed an increase in sales since 2017.
- For instance, Mahindra First Choice Wheels has recorded a healthy sales growth of 40% during 2018-19 registering revenue of INR 148 crore.
- The company has sold more than 250,000 units of used cars during the same period and aims at increasing this figure by 40% by 2020.
- Currently, MFCW has 1,100 outlets across India. By 2020, the company is planning to increase the outlets to 1,200 out of which 11 outlets will be dedicated only for the sale of luxury cars.
Additionally, the online used car sellers have also registered good sales during 2017-19. CarDekho has been a pioneer in the online used car market recording a Y-o-Y growth rate of about 100% over the last three years.
Furthermore, consumers prefer safety, transparency, convenience, and negligible risk, while purchasing used cars, which in turn, provides the organized sector an upper edge, when compared to the unorganized sector.
Growing Demand for Luxury Used Cars
The used car market is witnessing a boom in the country, with the demand for luxury cars continually increasing.
Until few years, owning a luxury car used to be a dream for numerous consumers, owing to financial hurdles, but this is gradually changing, as the consumers can easily buy used luxury vehicles. Heavy depreciation in luxury car prices has made these vehicles, a preferred choice in the used car market. As per OLX, used luxury vehicles priced over INR 15 lakh were the preferred choice among the consumers. According to OLX, over 55,000 luxury cars (priced above INR 15 lakh) were listed on OLX every month and supply for premium cars jumped by over four times in 2017. As per the report, titled OLX Auto Note, top-end sedans and luxury cars added up to 38% of the total four-wheeler listings on the platform.
Some major factors driving the growth of the used luxury cars are as follows – high rate of depreciation value of the luxury cars, fast growing base of young population, increasing disposable income of the consumers (along with rapid urbanization), and growing internet penetration in non-metros.
As per automobile dealers, the demand for used luxury cars has been growing at approximately 35% - 40% year-on-year basis, as owners of the luxury cars usually sell off their vehicles after a year or two years, as they desire for upgraded and better models. Additionally, apart from the reasons, majority buyers of these vehicles are from Tier-1 and Tier-2 cities.
With the rise in the consumers’ disposable incomes, they are not hesitant to spend on luxury goods and services. For these consumers, luxury is indulgence; as a result, they want themselves to be associated with top brands to make a statement.
The market for used cars in India is consolidated, with major players holding largest share of the market due to their business models and increased number of pre-owned car retail outlets. The major players include OLX, Mahindra First Choice Wheels, CARS24, Maruti True Value, and Hyundai H Promise
Other players, such as Quikr, Honda Auto Terrace, Ford Assured, Toyota U-Trust, etc., are in the process of expanding their outlets and operations in the local market. The unorganized sector occupies nearly 80% of the total market.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
Read the full report: https://www.reportlinker.com/p05786690/?utm_source=GNW
ReportLinker is an award-winning market research solution. Reportlinker finds and organizes the latest industry data so you get all the market research you need - instantly, in one place.
CONTACT: Clare: email@example.com US: (339)-368-6001 Intl: +1 339-368-6001