India’s second-hand car market is projected to grow by 80 lakh units by FY2027, with non-metro cities following suit.
Currently, the demand for used cars is 40 per cent in tier-2 cities and 25 per cent in tier-3 cities. This overall contribution of 65 per cent is slated to reach 75 per cent in the next four to five years.
The affordability and digitised sales of pre-owned cars have led to a massive increase in their demand. Moreover, factors like higher disposable income and the preference for personal mobility have also contributed to this growth.
How has the Used-Car Sector in India Shown Exponential Growth?
During the pandemic, the new and used-car markets struggled to progress, and now both have shown a tremendous shift., Here are some of our observations that have led to a boom in this lucrative industry over the last couple of years.
1. Affordable Options that Cater to Different Income Groups
SUVs, MUVs, and hatchbacks are very much in demand. People in need of a second-hand car are also looking for utility and functionality along with efficiency. Furthermore, there are numerous options available for the buyer in terms of model selection. This is why there is an increase in the number of used SUV cars in Surat and similar cities. Not only are these cars great for going on a road trip with the family, but are also perfect for day-to-day use.
2. Improved Connectivity across India
Be it urban or rural regions, the average car owner used to hold their vehicle for at least five to six years. However, due to several reasons, it has dropped to three years. Therefore, we can see more and more used cars in Jaipur , Mumbai, Hyderabad, Delhi NCR, and other major cities. The improved connectivity in these regions has also been a driving factor in the sale of second-hand cars.
3. Elevated Lifestyle
The digitisation of sales in the pre-owned car market has greatly improved over the years. We have also seen advancements in technology and infrastructure in some rural areas. In light of these factors, and the growing income levels, the used car market has seen significant growth in tier-2 and tier-3 cities. Nowadays, one can find a plethora of used cars in Coimbatore , Chandigarh, Ghaziabad, Indore, and similar places.
The Future of the Used Car Market
The used-car market is currently quite secure and has excellent potential to expand. In the next four to five years, this industry can also experience more digitisation and organisation. Over the years, the informal sale of cars has reduced considerably due to the emergence of pre-owned vehicle business hubs with tons of cars listed. This has also encouraged easy access and simpler processes while buying and selling cars.
(PRNewswire / ANI)