Global Used Cars Market Revenue to Witness Rapid Growth in the Near Future
The global used cars market is anticipated to be valued at $1,970.0 billion by 2028, surging from $1,179.8 billion in 2020, at a noteworthy CAGR of 6.8%.
Analysis of Covid-19 Impact on Used Cars Market
The Covid-19 impact on used cars market has been moderate. The imposed lockdown measures across the world affected the automobile industry for the sales of new vehicles, but the used cars sector was considerably less affected by the Covid-19 pandemic. The general population find used cars economically more feasible as compared to the new cars. According to "True Value an organized used car retailer" of India, demand for used cars surged during the pandemic with the preference for personal mobility getting stronger. At Maruti True Value, inquiries witnessed a growth of 6% in FY21. These factors are expected to impact the used cars market positively.
The coronavirus pandemic has enforced the companies in the used cars industry to adopt new methods of operation such as implementation of predictive analytics to forecast losses accurately, use of E-commerce channels for sales of the used cars which are projected to foster the growth of the market.
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Global Used Cars Market Analysis
The arrival of organized players in the market in developing nations is anticipated to aid the growth of used cars market in the forecast period. Original equipment manufacturers (OEMs) in the used car businesses offer professionally managed services along with value for money and customized propositions to customers in-turn enabling them to achieve their aspiration to upgrade to a higher segment with a pre-owned car through both online and offline presence. These factors are anticipated to aid the growth of used cars market in the forecast period.
The lack of uniform rules and regulatory framework, such as insurance benefits, quality control, maintenance, and roadside assistance, can restrict the used car market growth. The unorganized market structure in developing countries has also become a major obstacle to market growth. Independent and unorganized dealers sell vehicles without any warranty or product standardization. These factors can hamper the growth of the market.
The utilization of e-commerce channels for promotion and sales of used cars is expected to open opportunities for the used cars market. The independent dealers and franchise owners are expected to utilize e-commerce for lead generation and product display for used cars. In addition to this, implementation of technology is projected to open newer investment avenues in the industry. For instance, in February 2020 the German company Mercedes-Benz began the implementation of blockchain technology to store and maintain a maintenance history to record the carbon footprint of used cars in Beijing. These new developments are anticipated to open new scope of opportunities for the global used cars market
Global Used Cars Market, Segmentation
The global used cars market is segmented based on vehicle type, fuel type, distribution channel and region.
Vehicle Type:
The systems segment is further classified into hatchback, sedans, SUV and others. Among these, the SUV sub-segment is anticipated to generate the maximum revenue and surpass $790.2 billion by 2028, with an increase from $444.9 billion in 2020.
The growing demand for the SUVs in the emerging economies such as China and India due to rise in per capita income from economic development has aided the growth of the SUV segment. In India, sales are currently growing due to increasing per capita income of the urban population. Similarly, in Africa, the rapid pace of urbanization and economic development means that the demand for premium and luxury vehicles is relatively strong. These factors are expected to aid the growth of this subsegment.
Fuel Type:
The application segment is further classified into petrol, diesel, and others. Among these, others subsegment is anticipated to have the fastest growth in the forecast period and surpass $472.6 billion by 2028, with an increase from $275.7 billion in 2020.
The augmenting demand of environmental friendly fuels that can aid in reducing the environmental pollution through cars is expected to aid the growth of the others subsegment in the forecast period. The automobiles are responsible for environmental pollution to a great extent and as passenger cars are the largest fleet of vehicles on the on the road, the need for reducing emissions from automobiles has increased, supplementing the utilization of fuels with electricity, thus aiding the growth of other fuels subsegment in the forecast period.
Distribution Channel:
The distribution channel segment is further divided into franchised dealer and independent dealer. The independent dealer sub-segment is projected to be most dominating in the global market in terms of distribution channel and register a revenue of $1181.60 billion during the forecast timeframe of 2021-2028.
The market in developing countries such as India is currently dominated by independent dealers that don’t have their own inventory but rather run on their own platform for customer to customer (C2C) sales. They generate revenue by the means of commissions earned by facilitating the sale of used cars. The large presence of independent car dealers is a factor supplementing the growth of independent dealer subsegment
Region:
The used cars market for the Asia-Pacific region generated a revenue of $309.8 million in 2020 and is further projected to reach up to $546.7 million by 2028. The Asia-Pacific region is expected to be the most lucrative region for the used cars market in the forecast period. The growing demand for mobility in the emerging markets, such as India and China due to increased urban population in cities along with the increasing per capita income of the population has propelled the growth of used cars market in the Asia-Pacific region.
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Key Players in the Global Used Cars Market
Some of the leading global used cars market players are
- TrueCar, Inc
- Lithia Motors, Inc.
- Group 1 Automotive, Inc.
- THE HERTZ CORPORATION
- Pendragon PLC
- Asbury Automotive Group, Inc.
- AutoNation, Inc
- CarMax Business Services LLC
- Cox Automotive
- Hendrick Automotive Group.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.