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The used car market is estimated to grow at a CAGR of 6.7% between 2022 and 2027. The size of the market is forecast to increase by USD 703.33 billion. The growth of the market depends on several factors, including the increasing number of new models of cars launched due to high competition, the declining ownership cycle of vehicles among urban consumers in emerging countries, and the excellent value-for-money proposition of used cars.
This report extensively covers market segmentation by vehicle type (compact car, SUV, and mid-size), channel (organized and unorganized), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The declining ownership cycle of vehicles among urban consumers in emerging countries is notably driving the market growth, although factors such as an increase in the number of on-demand taxi operators may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The declining ownership cycle of vehicles among urban consumers in emerging countries is notably driving pre-owned car market growth. The ownership duration of cars is shortened owing to new technological advances in automotive which attract customers to buy new cars. However, due to financial constraints, customers often sell their existing cars to used car dealers or online used car portals to use the funds raised for a new car purchase. Moreover, the easy availability of bank loans also facilitates the financing for new car purchases.
The factors determining the prices of used cars are the number of years the vehicle was driven, the distance driven, and the number of damages caused due to accidents and other faults. In India, a used car having no major faults can fetch up to 70% of its actual price after one year of ownership and about 62% of its actual price after three years of ownership. Such convincing values encourage car owners to sell their cars at the earliest convenience to get back most of the car value. Hence, these factors will drive market growth during the forecast period.
Growing demand for car subscription services is an emerging trend in the pre-owned car market. The alternative to owning or leasing a vehicle is a car subscription. These consumers are allowed to use a car for an all-inclusive monthly fee, which includes roadside assistance, insurance, and maintenance. Such programs also allow the subscriber to change cars at a notice of a few days.
Several such services are provided by various auto manufacturers in major regions across the globe. For instance, Volvo's car subscription service is called Care by Volvo. Some of the other companies, such as Hyundai Motor Co. and Mahindra and Mahindra Ltd., also offer car subscription services. Additionally, consumers that find high-priced cars unaffordable due to their high cost of ownership or leasing prefer such car subscription services to get the experience of driving a luxury car. These services augmented the demand for these cars. Therefore, these factors will drive the market during the forecast period.
The increase in the number of on-demand taxi operators is a major challenge impeding the pre-owned car market. Owing to the financial constraints of some users on-demand taxi services have emerged as a convenient alternative to purchasing a new car. On-demand taxi services provide convenient and comfortable means of transport as well as save time and energy on finding suitable parking. Moreover, unlike self-drive car rental companies, on-demand taxi operators need not maintain a fleet but rather be available to a potential customer through the means of mobile applications. The business model is flexible and easier to manage than self-drive car rental companies.
On-demand taxi operators are also focusing on introducing on-demand bike taxis to tap into more customer segments. Major on-demand taxi operators like Uber and Ola cabs also invest in advertisements spanning over mediums like digital, television, and print to increase their brand awareness. Hence, the above-mentioned factors will hinder the global market growth during the forecast period.
The report includes the adoption lifecycle of the pre-owned car market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Used Car Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the pre-owned car market.
Berman Auto Group - The company operates under one segment. The company under this segment offers certified second-hand cars and new cars under various ranges of prices. The key offerings of the company include various second-hand cars such as Nissan car, Ford Edge, Base AWD, and Nissan Armada.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The used car industry share growth by the compact cars segment will be significant during the forecast period. Compact-size car is a vehicle size class that is between subcompact cars and mid-size cars.
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The compact cars segment was valued at USD 767.15 billion in 2017 and continued to grow until 2021. The compact segment in the market is driven by the increasing specifications of compact cars and the rising need for personal mobility. In the current scenario of increasing traffic congestion, compact cars are easier to drive than large cars. Also, they emit significantly fewer harmful gases and are, therefore, witnessing high adoption. Moreover, the fluctuating prices of fuel and the growing preference for fuel-efficient personal mobility solutions drive the compact car segment in the global market. India is one of the largest markets in the pre-owned compact car segment. The improving quality of used cars offered by the organized sector drives the demand for compact cars. These factors will boost the demand for used cars during the forecast period.
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APAC is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the pre-owned car market during the forecast period.
APAC is home to some of the largest automotive markets in the world. In APAC, the high demand for four-wheelers, especially in China, is contributing to revenue generation in the regional market. In addition, the growing popularity of used car retailing in emerging markets, such as India, is driving the growth of the regional used car industry.
Online sales also contribute to the major portion of the organized used car sales in APAC. One of the prominent vendors operating in the regional automotive e-retail market is Alibaba Group Holding Ltd. Alibaba offers used passenger cars on its web portal. The dealers of used cars are transitioning from their traditional brick-and-mortar stores to online platforms for generating leads and increasing their customer base. The rising customer preference for online used-car portals, such as Quikr and OLX, to physical stores, has induced OEMs to introduce online portals for selling used cars.
The automotive industry in APAC was adversely impacted in 2020 due to the COVID-19 outbreak. However, since 2021, automobile manufacturing has been recovering owing to the vaccination drives, which led to the control of the disease in the region. Also, companies have been increasing their sales and investing in electric vehicle production with supportive government initiatives. Thus, the growing sales of new cars drive the availability of used cars in the market. This consequently will boost the demand for used cars in APAC during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Vehicle Type (Compact car, SUV, and Midsize), Channel (Organized and Unorganized), and Geography (APAC, North America, Europe, Middle East and Africa, and South America).
Technavio categorizes the global used car market as a part of the global automotive market under the global automobiles and components industry. The parent market, the global automotive market, covers companies engaged in the production of vehicles such as passenger cars, commercial vehicles, and all-terrain vehicles. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Used Car Market Scope |
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Report Coverage |
Details |
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Page number |
168 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.7% |
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Market growth 2023-2027 |
USD 703.33 billion |
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Market structure |
Concentrated |
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YoY growth 2022-2023(%) |
6.18 |
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Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 41% |
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Key countries |
US, China, Germany, UK, and France |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alibaba Group Holding Ltd, Asbury Automotive Group Inc., AutoNation Inc., Autotrader Inc., Berman Auto Group, CarGurus Inc., CarMax Inc., Cars24 Services Pvt. Ltd., DriveTime Automotive Group Inc., eBay Inc., Group 1 Automotive Inc., Hendrick Automotive Group, Hertz Global Holdings Inc., Lithia Motors Inc., Mahindra and Mahindra Ltd., Penske Corp., Scout24 AG, Sonic Automotive Inc., Toyota Motor Corp., and TrueCar Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Vehicle Type
7 Market Segmentation by Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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