The Indian used-car market that is valued at $23 billion in FY 2021-2022 is projected to grow and expand at double the rate at a CAGR of 19.5 pc till FY 2026-2027, according to the Indian Blue Book (IBB) report that was unveiled at an event held in Mumbai recently. The 5th edition of the FY 2021-2022 Indian Blue Book used car report was presented by Car & Bike and Das Welt Auto.
India’s used-vehicle industry is currently transitioning from an unorganized setup – where transactions happen via roadside garage mechanics, small brokers and between car owners – to an organized system with more players entering the market. As per the report, among the leading factors that will contribute to this growth of the used-car market in the next five years are a rising middle-class and young population; rising disposable incomes; technology driven transparency, convenience, simplicity of transactions; availability of certified cars; decrease in the average tenure of ownership for cars and two-wheelers due to larger disposable incomes; the launch of new models within shorter time frames; dealer trade-in bonuses and buyback assurances.
Mr Ashutosh Pandey, CEO & MD, Mahindra First Choice said, “Used cars, which were once considered a compromise, are now making their way into the consideration set of consumers when they think about purchasing a car. There is no reason our industry cannot achieve double-digit growth for many years to come.”
The top five reasons why Indian consumers opt for a used vehicle are need for mobility for personal and business growth, budget constraints and macro-economic uncertainty, progressive industry players offering refurbished, certified, high-quality cars with warranties, digital and AI led transformation increase convenience, trust and transparency and value for money nature of used cars compared to new cars.
Commenting on the report, Mr Ashish Gupta, Brand Director, Volkswagen Passenger Cars India said, “The used car market has accelerated since the pandemic. Customers are displaying a considerable preference towards used cars and the gap between new cars and used car sales is reducing phenomenally. As per the report, the organized used car market share is expected to increase from 20 pc in FY 2021-2022 to 45 pc in FY 2026-2027.”
The Indian used car market is expected to touch sales of up to eight million units by FY 2026-2027. It is projected to grow at double the rate in value, at a CAGR of 19.5 pc till FY 2026-2027. The demand in smaller towns is expected to grow at a 30 pc CAGR by FY 2026-2027 as compared to a 10 pc CAGR in the top 40 cities.