India’s Pre-Owned Car Market: The Indian pre-owned car industry, which stayed strong despite challenges in FY22, witnessed a significant 14-16 per cent growth in FY23. This is set to grow further and the OLX Mobility report predicts that it will expand to Rs 5 trillion by FY28.
Pre-Owned Car Industry: Small Cars Losing Share To UVsÂ
According to the report, small cars continued to dominate the preowned car market even in FY23 but they are now losing share to utility vehicles (UVs) in the pre-owned car market.
The report suggested that the share expansion is expected to continue going forward as the recently launched compact UVs come into the pre-owned market.
Siddharth Agrawal, Country Head – Marketing, OLX India, said that the shift aligns with the broader trend observed in the new car market, where UVs have been steadily gaining popularity.Â
“On a base which is growing by 2x, the UVS will grow 2x within that growing base. This means UVS will grow by almost 4X in the next five years,” Agrawal told Zee Business’ Raghwendra Shukla.
Pre-Owned Car Market Trend: Electrification Is On The Rise
Also, the electrification trend is on the rise – both in the new car market and the used car market. The report said that the sales of new electric vehicles reached 59K units in FY23, and 42K in
the first half of FY24. In the new car segment of EVs, Tata Motors is the clear winner. It is followed by MG and Mahindra.Â
There are no specific numbers for EVs in the pre-owned segment as they are still coming in the used car market.
“EVs are still coming into the pre-owned market as it takes a bit for new cars to come to this market. So that is the reason there is no segmentation as of now. We are tracking some trends but it will be a little premature to comment as the number of EVs in the pre-owned market is very small,” Agrawal said.
Pre-Owned Car Market Trend: Key pointsÂ
– Reduction in Vehicle Age: The influx of UVs into the pre-owned market is contributing to a decrease in the average age of available cars. This is partly due to the faster replacement cycles observed among UV owners, who tend to upgrade their vehicles more frequently. The demand for UVs in the 5-7 years age bracket is the highest at 35 per cent, followed by those in the 0-4 years at 26 per cent.
– Increase in Average Buying Price: As more UVs enter the pre-owned market, the average buying price is expected to rise. This is due to the generally higher price bracket of UVs compared to other vehicle types like small cars or sedans.
– Dominance of Younger Vehicles: By FY28, it is anticipated that a significant portion of the pre-owned car market will comprise relatively newer vehicles. Cars within the 0 to 7-year age range are expected to form a major part of the market inventory, making the segment more attractive to buyers looking for newer, more modern vehicles.
