by shama@camphorsolutions.comThe second-hand automobile market in India has expanded dramatically during the last few years. Due to this, practically all used automobile dealerships are now making respectable profits, making the industry fully viable, and as evidenced by data the Indian used automobile will continue to rise speedily. With more and more people preferring affordable used cars rather than old ones, the emerging trend of the growth of the automobile industry is clearly visible. The used automobile market has also been steadily expanding into the remote regions of the nation, and to support its expansion, several businesses are prepared to invest money in building infrastructure and logistics.
Given that demand for automobiles is growing rapidly, suppliers and manufacturers have faced difficulty with the ever-increasing demands. Supply chain concerns have only served to worsen the issue as there aren’t enough freshly produced automobiles on the market, which is projected to lead to an increase in demand for older vehicles. Continue reading to learn about the used car industry in India, market size, emerging trends, the benefits of digitization of the used car industry for customers, and its potential for future growth.
Used Cars Market Size.Â
India ranks third-largest automobile industry globally in line with other nations like China, the USA, and Japan, and is gradually growing to become the second-largest after China in the coming years. According to a research study made by Motor Intelligence, the automobile industry in India has a worth of around $27,470M expanding at a CAGR of around 15% to reach $55,490 by the year 2028.
The used automobile market has experienced tremendous expansion as a result of price competition among industry players which has been one bright point in the used automobile business. Also, the key industry players have invested in the growth of dealership networks in order to build brands while keeping used car options competitive. Besides, technological improvements have altered the consumer position in the market, allowing consumers to be more conscious of the types of vehicles available, their residual value, and their features. Still, the used car business industry in India has an untapped potential to be realized.
Key Industry Players
Businesses offering certified, high-quality, refurbished cars with warranties, digital and AI transformations that increase convenience, trust, transparency and the affordability of used cars when compared to new cars are examples of progressive industry participants. CARS24, OLX, CarDekho, Mahindra First Choice, Maruti Suzuki True Value, Hyundai H Promise, etc. are some of the significant businesses that own the largest share of the market in India’s used automobile market as a result of their operations and the rise in the number of pre-owned car retail shops.
Key factors for the Growth of the Used Car Industry
Rise of E-Commerce–
Due to digital channels online car sales have increased significantly. To meet buyers’ demand for faster transactions with minimal documentation, digital players entered the industry resulting in the automotive industry growing more organized and professional.
Shift In Consumer Demand –
India’s price-conscious car market offers a better money option by buying used cars, as new cars depreciate by 30% in the first year. This segment’s rise is driven by societal acceptance and increased joy and emotions.
Reduction In the Ownership Period-
The interesting reason for the rise of the used car industry is the reduced ownership period of vehicles, which has increased from 6-7 years to 3.5 years by 2021. This has led to a greater supply of well-maintained used cars and increased options for buyers.
Increasing demand for used luxury cars-
The decline in ownership periods of normal cars has led to a rise in the premium car market, attracting affluent buyers. The easy selling and exchanging of used luxury cars make it cheaper to buy 1-2-year-old luxury cars at lower prices.
Increased reliability-
A well-maintained car is more reliable than its earlier counterparts due to improved technology. Manufacturers offer extendable warranties, ensuring hassle-free ownership for second owners. Extendable warranty periods can help address manufacturer-related defects without overhead costs. For those looking to sell their old car, explore the car maintenance section for tips and tricks.
Digital marketing strategies-
The players in the automotive industry are already developing creative campaigns on social media platforms and the websites of the competition.
Hassle-free customer experiences-
Users require easy reliable and convenient options to buy cars online from the comfort of their homes. Not only they do look for a hassle-free experience but also transparency. Now new -age start-ups have realized and working on digitizing the sale of used cars in major cities and towns in India.
The emergence of digital platforms-
The emergence of organized online and physically used car platforms, combined with an increase in demand for personal mobility and favorable government support, are also expected to drive growth.
Digital transformation in the used automobiles
The automotive industry is undergoing digital transformation to enhance efficiency and customer engagement, integrating digital tools in manufacturing, marketing, and retailing. Online marketplaces have played a key role in widening access to consumers at a single touch. The digital revolution, fueled by the pandemic, has accelerated the digital transition in industries like used car buying. Technologies like AR/VR and 360-degree perspectives have made digital conceivable, enabling dealerships to adapt and offer personalized experiences.
Moreover, digitization has allowed for transparency and symmetry of information among customers and buyers, which has led to the development of online sales channels, certified used vehicle programs, plus the solid standing of franchise dealers, all of which play an important part in boosting the market for used automobiles. For customers to enjoy seamless used automobile buying experiences, several leading businesses have established both virtual and brick-and-mortar showrooms.
Therefore, the automobile industry in India is undergoing significant changes due to global disruption, technology advancements, and shifting consumer habits. New ventures, such as electric cars, connected vehicles, and mobility fleet sharing, are further expected to smoothen customer experience and improve its affordability transforming the business into a hybrid business model in India.