The Indian used car market size is expected to rise from $ 18.3 billion in 2020 to $ 70.8 billion in 2030, says P&S Intelligence.
P&S Intelligence, the company that provides market research and consulting services catering to the market information needs of burgeoning industries across the world, says the industry will grow at a CAGR of 14.8% between 2021 and 2030.
With the growing influence of western culture through TV, magazines, and social media, the demand for luxury cars is rising in India, especially among the youth. However, most of the country's people are still not able to purchase new luxury vehicles, which is why they are looking at pre-owned automobiles. As a result, the demand for used cars is growing, the report said and added that the emergence of organised used car dealers is proving hugely beneficial.
For instance, Big Boy Toyz (BBT) offers used cars of various luxury brands, including BMW, Cadillac, Lexus, Land Rover, and Jaguar. As it is easier for customers to trust organised dealerships than individual vehicle sellers, the proliferation of more established players is acting as a key driver for the Indian used car market advance.
Key established players in the Indian used car market are Cars 24 Services, Big Boy Toyz, OLX, Quikr, Truebil, Droom Technologies, Mahindra, Maruti Suzuki, Honda Cars, Toyota, Ford and Tata Motors.
Key findings
- Unorganised sector accounts for higher vehicle sales
- Indians rapidly purchasing used cars online
- Large cars continue to be popular
- Market fragmented in nature
- Increasing demand for luxury cars key industry growth driver
- Organised auto dealers expanding their presence in India
The negative impact of the pandemic on the Indian used car market is because of the social distancing measures and lockdowns implemented in the country. The lockdowns have further rendered many people unemployed, while many more are working on substantially reduced salaries. This has led to a decrease in the purchasing powers, which is why people are mostly spending on essential items, such as medicines and ration.
In the coming years, organised bifurcation will witness faster growth in the Indian used car market based on sector. As most of the vehicle sellers are individual owners, customers do not generally trust them. Therefore, buyers are now shifting to the organised sector, which offers cars after rigorous quality checks and certification.
Throughout this decade, the Indian used car market is predicted to be dominated by the large category, under segmentation by vehicle type. Around the country, the demand for good-quality sports utility vehicles (SUVs) that are less driven is rising. Moreover, the increasing disposable income of people is allowing them to spend on second-hand SUVs.
Largest contributing state
Maharashtra is the largest contributor to the Indian used car market presently because of the high depreciation value of second-hand automobiles. Moreover, the increasing population of the youth, rising disposable income, surging internet penetration in Tier-2 and Tier-3 cities, and rapid urbanisation drive the demand for used cars in the state. Additionally, the state offers a supportive business environment to used car dealers and the vehicles themselves at low costs.
In the years to come, Delhi will be the fastest-growing state in the Indian used car market due to the decreasing average ownership duration of automobiles. Further, due to the high demand for such vehicles and intense competition in the market, automobile dealers often slash the prices massively and perform minor repairs, which increases the interest of people in used cars.
Courtesy: P&S Intelligence.