The global used car market attained 115.2 million units
in 2019 and is predicted to reach 275.3 million units by 2030, exhibiting a
CAGR of 8.7% during 2020–2030 (forecast period). The increasing number of
organized sector players such as CarGurus Inc.,CarMax Inc., and Cars24 Services
Pvt. Ltd. isone of the biggest factors fueling the advancement of the market.
The organized sector companies not only offer certified used cars at
competitive prices but they also provide service guarantees and warranties on
their vehicles.
Based on sector, the used car market is divided into unorganized and organized categories. Between the two, the organized division is predicted to exhibit faster growth in the coming years. This is credited to the higher preference of customers for dealer certified vehicles as compared to the vehicles sold in the unorganized sector without any guarantees and warrantees. Due to this factor, the certified programs are becoming a critical differentiating factor for the organized sector players. In addition to this, the rising popularity of online portals for both buying and selling of used vehicles in the developed nations such as the U.K., the U.S., Japan, and Germany will further boost the progress of the organized sector division in the market in the future years.
Based on sector, the used car market is divided into unorganized and organized categories. Between the two, the organized division is predicted to exhibit faster growth in the coming years. This is credited to the higher preference of customers for dealer certified vehicles as compared to the vehicles sold in the unorganized sector without any guarantees and warrantees. Due to this factor, the certified programs are becoming a critical differentiating factor for the organized sector players. In addition to this, the rising popularity of online portals for both buying and selling of used vehicles in the developed nations such as the U.K., the U.S., Japan, and Germany will further boost the progress of the organized sector division in the market in the future years.
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Under the vehicle type segmentation of the used car
market, the main categories are small, medium, and large. Out of these, the
medium division accounted for a majority of the market share, in volume, in the
past. The main factors responsible for the advancement of the category are the
high supply of good-quality, less-driven second-hand vehicles and the growing
spending power of buyers, especially in the various developing nations around
the world.
Under the propulsion segmentation, the internal
combustion engine (ICE) category recorded higher growth in the market during
the last few years. Furthermore, this category is predicted to exhibit rapid
progress in the developing regions across the globe such as Latin America,
Middle East, and Africa (LAMEA) and Asia-Pacific (APAC) in the coming years,
primarily due to the surging average age of the automobiles using ICE
propulsion. For example, in China, the average age of automobiles is presently
~5 years, while in other nations such as the U.S., the average vehicle age is
currently ~11 years. Thus, the ICE division will demonstrate higher growth in
the used car market between 2020 and 2030.
Geographically, the used car market is predicted to
register the highest CAGR in the LAMEA region in the forthcoming years. The
major factors driving the progress of the market in this region are the surging
manufacturing of automobiles and the increasing disposable income of the people
in various developing countries such as Mexico, Brazil, and Argentina. The
market is extremely fragmented in the Middle Eastern nations such as Saudi
Arabia and the U.A.E., on account of the presence of numerous unorganized
players such as Gargash Enterprises LLC,AL
FUTTAIM COMPANY LLC, and The Elite Cars in the region.
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The major players operating in the
used car market are increasingly focusing on getting into strategic
partnerships and launching mergers with each other, mainly for gaining a
foothold in the market. For instance, AB Volvo (U.S.), TrueCar Inc., and PenFed
Credit Union started a partnership for each other in December 2019. They worked
together on a private incentive program that offers competitive pricing and
various other incentives such as access to special rates and incentives on AB
Volvo’s premium vehicles to the members of PenFed Credit Union.
The COVID-19 pandemic has caused
large-scale unemployment and reduced earnings, which has, in turn, caused a
sharp fall in the spending power of people, thereby hampering the progress of
the market. Furthermore, the pandemic has made many market players and industry
stakeholders re-examine their strategies for the medium and long-term growth of
the industry.
