India Used Car Market Size and Share Analysis by Sector (Organized, Unorganized), Vehicle Type (Medium, Small, Large), Sales Medium (Offline, Online) - Industry Revenue Estimation to 2030

Market Overview

The Indian used car market size stood at $23,355.3 million in 2021, and it is expected to grow at a CAGR of 17.50% during 2021–2030, to reach $99,707 million by 2030.

The growth is mainly due to the rising internet penetration, which makes information on used cars easily available. Moreover, the surging demand for off-lease vehicles among franchises, car dealers, and leasing offices and the increasing need for car subscription services are expected to boost the growth during the forecast period.

India is one of the fastest-growing markets for premium and large vehicles, making it attractive for organized second-hand automobile firms. For instance, OLX Group, Quikr India Private Limited, and CarDekho.com provide online platforms to compare the prices and availability of used cars near people’s locations. This makes the entire purchase process simple and quick, without any need for prior appointments or unwanted negotiations with dealers.

Furthermore, facility expansions are the major strategic developments in the nation. For instance, CarDekho.com plans to open stores in the larger format in selected metro cities, including tier-I and tier-II cities, in India. Similarly, Volkswagen Group has announced the expansion of its pre-owned car dealership network in the country.

Moreover, online disruptors, in partnerships with OEMs, dealerships, and financial institutions, are creating shared value through insights into data on customer preferences and new model reselling patterns. In addition, the market is primed for online disruptors who offer value-added services, such as financing, easy processes, warranties, and maintenance plans.

Online Sales Medium Category To Witness Higher CAGR during Forecast Period

Based on sales medium, the offline category held a considerable share in the market in 2021. This is mainly due to the high consumer preference for buying a used car from a known dealer.

The online category is expected to grow at higher CAGR during 2021–2030. This can be ascribed to the fact that digitalization has reduced the need to contact the dealer at the first instance. Customers are able to quickly interact and easily access information through their personal computers and smartphones. Therefore, the rising internet penetration and ease of shopping and research via the online mode are expected to further drive the growth of the market in this category during the forecast period.

Shift to Organized Sector

In India, unorganized businesses have dominated the market. The major portion of the transactions are made by individuals trying to buy and sell cars. Since the parties involved are individuals and not organizations, it has been hard to establish trust between the parties involved. This drives the penetration of organized players, including OEMs and large companies. As their involvement increases, consumers will be encouraged to buy second-hand cars, due to the increasing sense of trust and reliability.

Therefore, the organized sector will undergo the faster growth, of 19.6%, during the forecast period.

These organizations offer free towing and other services at the dealership, to lure additional customers. These value-added services and benefits are helping the key organized players in the market increase their share and win the trust of the consumers, which is further expected to create demand in the market.

Maruti Suzuki India Ltd. (Maruti True Value) and Mahindra & Mahindra Ltd. (Mahindra First Choice Wheels) were among the first OEMs to commercialize used cars in India. Their entry ensured the quality of used cars and greater reliability of consumers. The key reason for OEMs to enter this market is to encourage the sale of new vehicles, by providing exciting offers on the exchange of the used ones. Some other OEMs entered with a purpose to tap into an additional revenue stream, by achieving security during an economic slowdown, as the used car demand is understood to be impacted less than that for new cars in the case of an economic slowdown.

Thus, with the increasing penetration of the organized sector with certified used vehicles at competitive rates, along with financial services, warranties, and service guarantees, the used car demand is projected to experience a huge boost, and the organized sector is expected to grow at the higher rate during the forecast period.

Rising Adoption of Online Retailing

The used car in Indian market is witnessing the rising adoption of online retailing. Internet access, urbanization, and expansion of the telecom infrastructure have all contributed to an improved flow of knowledge among customers. Furthermore, used car owners often use online platforms to advertise their cars. As a result, a larger number of people are willing to purchase and sell vehicles online, to make the transaction simpler and quicker, as both the parties—buyers and sellers—tend to complete the majority of the paperwork and negotiations online.

Additionally, buyers of used cars are more likely to try different models, and only after a lot of comparison via online channels do they purchase a vehicle; all this can be accomplished without even stepping out of the house. With the used car market going online, it has become more convenient for buyers to research pricing and vehicle details online.

In addition, key players in the market are continuously investing to further expand and have an online retailing, classifieds, or offline presence. For instance, in July 2022, Toyota Kirloskar Motor launched its used car outlet in India. The automaker has positioned TUCO as a one-stop shop for all value-added services related to purchasing a used Toyota vehicle, including financing (via Toyota Financial Services India), RTO assistance, insurance, and accessory sales.

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High Depreciation Rate and Declining Average Ownership Age

The high rate of depreciation of luxury vehicles has a twofold positive impact on the market. The reduction of the resale value of a vehicle increases the demand for it, due to the inverse relationship between price and demand. The increase in the depreciation value of a car reduces its resale value and, thus, encourages the car owner to sell it sooner, which, in effect, has brought down the average age of ownership of the car.

The average age of ownership of the car has nearly halved in the past decade, thus providing fairly new and more-reliable models in the used car market, which encourages people to buy them over new ones.

Key Players in India Used Car Market Are:

• Cars24 Services Private Ltd.
• OLX Group
• Big Boy Toyz Pvt. Ltd.
• Quikr India Private Limited
• Truebil
• Droom Technologies Pvt. Ltd.
• Maruti Suzuki India Limited
• CarDekho.com
• Mahindra & Mahindra Limited
• Honda Motor Co. Ltd.

India Used Car Market Size Breakdown by Segment 

The report analyzes the impact of the major drivers and restraints on the market, to offer accurate market estimations for 2017–2030.

Based on Sector

• Organized
• Unorganized

Based on Vehicle Type

• Medium
• Small
• Large

Based on Sales Medium

• Offline
• Online

Geographical Analysis

• Maharashtra
• Uttar Pradesh
• Karnataka
• Tamil Nadu
• Delhi