Used Car Market Set to Witness an Uptick during 2022 to 2030

Posted by Mrudula Karmarkar on July 12th, 2022

The global used car market size is expected to reach USD 2.67 trillion by 2030, according to a new report by Grand View Research, Inc. The market is anticipated to expand at a CAGR of 6.1% from 2022 to 2030. Rising technological advancements such as the implementation of digital technology in the market and the use of artificial intelligence to improve the online buying experience are expected to boost the market demand over the forecast period. Some of the other factors such as transparency between the owner and buyer and certified used vehicles programs also impacted the market for used cars. Furthermore, the growing adoption of used electric and hybrid cars has become one of the noticeable trends in the last few years. The increased number of new Electric Vehicles (EVs) and hybrid cars registered over the last few years is now flowing through into the market. For instance, European countries such as Germany, the U.K., Spain, and Austria have witnessed significant volume sales of petrol, EVs, and hybrid vehicles.

Globally, the growth of online sales channels also changed the overall consumption of used cars. As online automotive retailing accounts for a small percentage of total used car sales, there is a significant growth potential for this segment. Moreover, automotive dealers use their websites as a sales and marketing generation channel to drive buyers to the showroom floor where the consumers complete the purchase. However, nowadays, consumers are looking for e-commerce options for their entire purchases. Moreover, there is a rise in the number of digital sellers, such as Vroom; Carvana Inc.; eBay Motors; and Shift Technologies Inc., that specifically cater to online vehicle buyers and increase the competitiveness of the market.

Further, the COVID-19 outbreak will increase the demand for compact and midsize cars at affordable prices. With the fear of getting infected, people are opting for private transportation rather than public transportation. This is one of the key driving factors for the used car sales during this pandemic period and its aftermath. Furthermore, one of the notable phenomena emerging nowadays is the sales of petrol vehicles as fossil fuels are cheaper with the outbreak. In addition, the impact of COVID is visible in the automotive industry with the sales surge in the market for used cars despite plummeting growth in the new car sales segment. The majority of the customers are looking for more affordable means of transport that would be safe, and reasonable to buy (both ergonomically and economically). This also leads to the demand for entry-level used compact segments of cars. With employment uncertainties and variable cash flows in the economies, individuals would prefer used cars over new cars.

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Escalating investment in the SUV segment is also one of the key reasons, which caters to the demand traction in the market. Luxury brands have invested in launching vehicles in the SUV segment to add to their existing sports collection inventory. With the availability of a supply chain network of second-hand cars in the market, significant traction is expected in terms of volume sales in the market. Additionally, the significant change in people's transportation habits such as opting for individual mobility with their own vehicle is expected to create a great upsurge in the market.

Used Car Market Report Highlights

• Digitally generated leads with online sales channels are expected to attain prominence, and the brick and mortar/offline dealerships are expected to remain under severe pressure due to the COVID outbreak
• The organized dealership is expected to withstand the demand for used cars and eventually expected to hold a major share in the market
• Data analytics tools and artificial intelligence are assisting non-banking financial companies to bring ineffectiveness in the underwriting process. Used car dealers with this opportunity are tying up with the financial agencies, and this process will further help to make loans easily available to customers
• The Asia Pacific region is expected to witness significant growth over the forecast period, majorly due to the increasing supply base and demand for affordable used cars

The key players in the market are focusing on expanding the customer base to gain a competitive edge in the market. Thus, vendors are taking several strategic initiatives, such as collaborations, acquisitions & mergers, and partnerships. For instance, in 2020, Volkswagen announced a major investment in the market for used cars by a collaboration of its own used-car chain, Das WeltAuto, with various used car platforms. Mainstream automakers have also been expanding their presence in this space with their pre-owned car sales networks like Maruti Suzuki's True Value, M&M Mahindra's First Choice Wheels, and Toyota's U Trust. Some prominent players in the global used car market include:

• Alibaba.com
• Asbury Automotive Group
• AutoNation Inc.
• CarMax Business Services, LLC
• Cox Automotive
• eBay Inc.
• Group 1 Automotive Inc.
• Hendrick Automotive Group
• LITHIA Motor Inc.
• Scout24 AG
• TrueCar, Inc.