Used Car Market Size Is Poised To Reach $2,150.6 Billion By 2027: Grand View Research Inc.

 

The global used car market size is expected to reach USD 2,150.6 billion by 2027, according to a new report by Grand View Research, Inc., expanding at a CAGR of 5.5% over the forecast period. Rising technological advancements such as the implementation of digital technology in the market and the use of artificial intelligence to improve online buying experience are expected to boost the market demand over the forecast period. 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 Vehicle (EV) 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 registered significant volume sales for petrol, EVs, and hybrid vehicles.

Globally, the growth of online sales channels also changed the overall consumption of the used cars. As online automotive retailing accounts for the 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 eCommerce options for the entire purchase. Also, 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.

Escalating investment in the SUV segment is also one of the key reasons which cater 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 the supply chain network of second-hand cars in the market, there is huge traction expected in terms of volume sales in the market. Additionally, the significant change in people transporting habits such as opting for individual mobility with their own vehicle is expected to create a great upsurge in the market.

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Further, the COVID-19 outbreak will increase the demand for compact and mid sizes cars at affordable prices. With the fear of getting infected, people are opting for private transportations rather than public transportation. This is one of the key driving factors for the used car sales in this pandemic period and aftermath. Furthermore, one of the notable phenomena emerging nowadays is the sales of petrol vehicles as fossil fuels are cheaper with the outbreak. Also, the impact of COVID-19 is clearly visible in the automotive industry with the sales surge in the market for used cars despite plummeted 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). With employment uncertainties and variable cash flows in the economies, individuals would prefer used cars over new cars.

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 a used car and eventually expected to hold a major market share
• 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 for customers
• The Asia Pacific market for used cars is expected to have significant growth over the forecast period, majorly due to the increasing supply base and demand for affordable used cars
• The key market players are Alibaba Group (Alibaba.com); Asbury Automotive Group; Cox Automotive; TrueCar, Inc.; Hendrick Automotive Group; Group 1 Automotive Inc.; and eBay Inc.

Until recently, automobile manufacturers and dealers have mainly focused on their new vehicle business with the exclusion of used cars, often viewed used cars as a byproduct. However, the competition in the market and the threat of new entries have created a great extent of an upsurge in the used car dealership. Moreover, the added quality and reliability of used cars changed the consumer attitude and increased the sales of the used passenger cars. Investing in used car management has become one of the market's requirements characterized by slimming margin, relentless competition, and demanding consumers.

The technology advancement such as the development of the internet, introduction of hybrid and the electric vehicle has changed the buyer position in the market. Moreover, consumers are now knowledgeable about the vehicle, their residual value, quality finance charges, availability, the price applied, and sometimes the profit margin that the seller makes in a closing deal. This knowledge has changed the dynamics and managed to turn customer intelligence to their advantage. Resultantly, consumers are more inclined towards buying the used cars nowadays.

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Grand View Research has segmented the global used car market based on vehicle type, vendor type, fuel type, size, sales channel:

Used Car Vehicle Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

·         Hybrid

·         Conventional

·         Electric

Used Car Vendor Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

·         Organized

·         Unorganized

Used Car Fuel Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

·         Diesel

·         Petrol

·         Others

Used Car Size Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

·         Compact Car

·         Mid-Sized

·         SUV

Used Car Sales Channel Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

·         Offline

·         Online

About Grand View Research

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.

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