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The global used car market size was 115.2 million units in 2019, which is projected to reach 275.3 million units by 2030, growing at a CAGR of 8.7% during the forecast period (2020–2030). With the increase in car ownership, the global used car industry has entered a period of rapid development. The rise in the demand for off-lease vehicles by franchises, car dealers, and leasing offices, and the growing popularity of car subscription services are expected to boost the market growth during the forecast period.
COVID-19’s rapid spread has had a significant impact on the global automotive industry, with a downturn in the demand for new and old vehicles. The impact of the global economic conditions and market sentiment directly affects the business of key players. Furthermore, the keen competition amongst peers, unstable material costs, and, most recently, the ban on the export and import, imposed by various economies to control the COVID-19 pandemic, are expected to result in a fall in business for all major players in the market.
In 2019, the unorganized category held the larger share in the used car market, on the basis of sector. This was mainly due to the high share of unorganized players in the developing markets, such as India, China, Thailand, Brazil, and Mexico. Moreover, due to the weak regulatory environment around used car sale and purchase, developing countries are expected to witness the continued dominance of unorganized players during the forecast period.
The used car market is expected to witness faster growth in the electric bifurcation, on the basis of propulsion. The demand for electric vehicles is increasing globally, owing to their eco-friendly nature. With the rising green consciousness, coupled with the electrification of vehicles and powertrain systems, consumers are expected to shift to buying used electric cars during the forecast period.
The used car market has been categorized into offline and online, based on sales medium. The offline category held the larger share, in terms of volume, in 2019, mainly due to the high consumer preference for buying a used car from a known dealer. Furthermore, it is important for consumers to take a test drive and go through various options before buying a used car from a dealer. Therefore, the offline category is expected to dominate the market throughout the forecast period.
Globally, North America was the largest market for used cars in 2019. The region includes developed countries, such as the U.S. and Canada, which are prominent markets for used cars. The increased governmental regulations, aimed toward more-organized operations, are also benefiting the market growth in the region. Moreover, the digital revolution is changing the retailing scenario of used cars. With a continuous rise in the number of new digitally fluent entrants, such as Carvana Co., Fair Financial Corp., and Vroom Inc., the North American used car market is witnessing a major positive disruption.
The LAMEA used car market is expected to witness the fastest growth during the forecast period. The developing economies of Brazil, Mexico, and Argentina are offering growth opportunities to the players in the used car market, as the increasing buying power of the individuals in these nations is allowing them to buy used cars, if not new, thus creating enormous opportunities for independent dealerships and individuals selling their vehicles. Moreover, online disruptors partnering with vehicle manufacturers, dealerships, and financial institutions are creating shared value through data, such as customer preferences and new-model reselling patterns. Therefore, the developing countries in the region are the key markets to invest, mainly due to favorable operating conditions and high growth opportunities.
One of the major trends being witnessed in the used car market is collaborations and partnerships among different system providers, original equipment manufacturers (OEMs), online solution providers, and other stakeholders. These partnerships are aimed at helping companies gain access to the existing knowledge of the partner companies and enhance their portfolio, with the addition of an attractive suite of products and services. For instance, in January 2020, CarMax Inc. (CarMax) partnered with digital automotive firm Edmunds.com Inc. (Edmunds). CarMax invested $50.0 million to acquire a minority stake in Edmunds. This strategic relationship is expected to strengthen CarMax Inc.’s new omni-channel experience, which empowers customers to buy a car on their terms, whether completely from home, in-store, or via a seamlessly integrated combination of both methods.
The used car market in developing countries, such as China, India, Brazil, and Mexico, has historically been dominated by unorganized-sector players. Most of the transactions have been made by individual people trying to buy and sell a car. Since the parties involved are individuals and not organizations, it has been hard to establish trust between them. Organized players, along with providing used cars, also provide offers, such as free towing and free services at the dealership, to lure additional customers. These value-added services and benefits are helping key organized players in the market increase their share and win the trust of consumers, which is further expected to create traction in the market.
Internet connectivity, along with urbanization and development in the telecom sector, has enabled a much better flow of information among people. Furthermore, this has been used rapidly by used car owners to advertise their products and spread the information about the available used cars. This not only makes the sale easier and faster, but also enables more people to sell and buy cars online, thus expanding the market. The used car market has largely been driven by the supply side rather than the demand side, and the availability of internet connectivity has made it easier for people to advertise their used cars effectively, thus increasing the overall supply and, in turn, providing a boost to the market.
|Base Year (2019) Market Size||115.2 Million Units|
|Forecast Period (2020-2030) CAGR||8.7%|
|Report Coverage||Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Analysis, Companies’ Strategical Developments, Product Benchmarking, Company Profiling|
|Market Size by Segments||By Sector; By Vehicle Type; By Propulsion; By Sales Medium; By Geography|
|Market Size of Geographies||U.S., Canada, Germany, France, Italy, U.K., Japan, China, India, South Korea, Brazil, Mexico, Argentina|
|Secondary Sources and References (Partial List)||International Council on Clean Transportation (ICCT), International Road Transport Union (IRU), Japan Automobile Manufacturers Association (JAMA), New Zealand Used Car Industry Association (Inc.), Organisation Internationale des Constructeurs d'Automobiles (OICA), Society of Automotive Engineers (SAE), Society of Indian Automobile Manufacturers (SIAM)|
The used car market is highly fragmented, with the presence of numerous global players with a large number of unorganized local players. In recent years, the major players in the market have taken several strategic measures, such as product launches, partnerships, and facility expansions, to gain a competitive edge. For instance, in January 2020, TrueCar Inc. launched a new consumer experience, in response to the changing consumer needs in a digital world. The company now offers more flexibility to buyers looking for price clarity and convenience. The company also expanded its product offerings to include vehicle discovery tools, an upgraded used car experience, and a feature on its website which allows visitors to choose how many certified dealers they want to connect with.
In June 2019, Group 1 Automotive Inc. launched the online vehicle purchasing platform in the U.S., AcceleRide, which allows customers to purchase a new or used vehicle online. AcceleRide provides customers with the convenience of uploading all the required information digitally, without ever having to visit a dealership.
In March 2019, Droom Technology Pvt. Ltd. launched an internet of things (IoT)-enabled ECO Smart device that connects with a car’s on-board diagnostic (OBD) II port and integrates with the car’s sensors, hardware modules, data transmitters, control units. This IoT-enabled ECO Smart device allows the customer to track the car's performance, health, and damage factors.
The research offers size of the global used car market for the period 2014–2030.
Based on Sector
Based on Vehicle Type
Based on Propulsion
Based on Sales Medium
In 2030, the used car market will witness sales of 275.3 million units.
The unorganized sector dominated the used car industry in 2019.
North America is the largest, while LAMEA would be the fastest-growing region in the used car market.
The used car industry growth has slowed down in 2020 due to the widespread financial crisis triggered by the COVID-19 pandemic.
The dominance of the unorganized sector has made the used car market extremely fragmented.