The Indian second-hand car market is reportedly poised to witness a robust growth of 19.5% by 2027. As per expert analysts, the demand for pre-owned cars will escalate by nearly 30% across smaller towns as compared to urban locations.
Notably, this massive expansion is credited to the growing per capita income levels, abundant availability of certified vehicles, and launch of the latest car models within a short time span, among others.
Moreover, the emergence of online used car channels owing to the elevating demand for personal mobility is further fueling the business dynamics.
Sources claim that more than 3.5 million pre-owned cars were sold in the country in Fiscal Year 2022, breaking the sales record of FY2021.
The sales channel of pre-owned cars in India has witnessed a drastic transformation. In other words, initially, the sales were made via small brokers, roadside garages, and between car owners. But now, with the entry of potential players, the deals are made in a more organized manner.
The Managing Director and CEO of Mahindra First Choice quoted his opinion on the matter by stating that the emergence of the COVID-19 pandemic has shifted the inclination of the masses toward used cars. There were times when these vehicles were considered as a compromise, but now investing on pre-owned cars has started to be regarded as a wise decision, he added.
Industry experts are projecting that the used car to new car ratio will reach 1:9 over the forecast period, whereas, presently the ratio stands at 1:4.
Also, Ashish Gupta, Brand Director at Volkswagen Passenger Cars India said that the gap between brand-new and pre-owned cars has decreased phenomenally. This is powered by the fact that customers are making wiser financial decisions post the economic recession caused by the COVID-19 pandemic outrage.
Even the global market pertaining to used cars is witnessing widespread growth ascribing to factors such as a rise in the number of first-time buyers, digitalization, prompt availability of convenient financing options, and rapid evolution in demographics and customer ambitions.
