- Demand for feature-packed SUVs has surged to 59 per cent in the first half of the financial year.
India’s thriving used car market is set to grow exponentially in the next 10 years. According to CARS24, one of India’s top private used car providers, the segment is likely to witness a four-fold growth by 2034. It is expected to become a $100 billion market (roughly converted to around 82 lakh crore) as more Indians are keen on buying second-hand models as growing middle class use rising disposable income to upgrade to four-wheelers.
One of the biggest reasons behind the massive growth of the used car market in India is attributed to customers looking to upgrade their choice of vehicles quite frequently. Vikram Chopra, Founder and CEO at CARS24, said the changing dynamics will be key for the segment to see a big jump in sales in the next 10 years. He said, an internal study conducted by the Gurugram-based used car seller, the growth of the segment is set to be 15 per cent CAGR.
CARS24, which started operating in the used car business eight years ago, has seen the segment populated by other popular players like Spinny and others in recent times. The size of the used car market, which used be around $15 billion (roughly converted to around ₹1.25 lakh crore), has so far grown around 60 per cent in the last eight years. “I think, in the last 3-4 years, with different kinds of cars coming up, the market has truly accelerated,” said Chopra in an interview to PTI.
The used car market, in spite of growing at an encouraging rate, is still paltry compared to some of the other global markets like United States, China or Europe. Chopra said, car owners in India are at only around eight per cent compared to global market average of nearly 80 per cent. “So we still have a long way to go from here,” Chopra said.
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According to CARS24, short duration of vehicle ownership is another key factor why the second-hand car market has been growing. The used-car seller’s internal study suggests young buyers are more prone to selling off vehicles within five years and upgrade to a new one. High demand for second-hand SUVs is also another reason why the segment has seen quick growth. Within the last four financial years, second-hand SUVs have seen demands soar from 30 per cent to 59 per cent. “As millennials increasingly opt for more frequent car upgrades, the market is witnessing a consistent inflow of high-quality, aspirational cars,” Chopra said.
Rise in disposable income has meant used car buyers going for more expensive vehicles than entry-level models. An analysis done by CARS24 shows that there has been a 14 per cent increase in sales of used cars priced more than ₹8 lakh in the last five years. The number of used car buyers is highest in metro cities where the segment witnesses 65 per cent of overall sales. Chopra said that the used car seller expects electric vehicles to soon be a part of the segment within the next five years.
First Published Date: 04 Mar 2024, 10:36 AM IST
