India Used Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Indian used car market is segmented by Vehicle Type (Hatchbacks, Sedan, and Sports Utility Vehicles), Vendor Type (Organized and Unorganized), and Fuel Type (Petrol and Diesel)

Market Snapshot

India Used Car Market - Market Summary
Study Period:

2018 - 2026

Base Year:

2020

CAGR:

15.12 %

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Market Overview

The Indian used car market was valued at USD 24.24 billion in 2019, and it is expected to register a CAGR of 15.12% during the forecast period (2020-2025).

  • The used car market evolved in the country, with the growth of the organized and semi-organized sector. The pre-owned car or used car market crossed the 4 million units mark in FY 2018, which states that the used car market is 1.3 times of the new car market. One of the key growth drivers of the market is the revision of the GST levied on used cars from 28% to 12-18%.
  • With the new BS VI emission standards implemented by the Government of India, tehcnological cost of cars to meet the standards will be barren by the consumer. Additionally, according to the MD and CEO of Mahindra First Choice Wheels (MFCW), the companies' focus on reducing the production of diesel cars, like Maruti Suzuki's decision to exit the diesel car segment by April 2020, is also expected to increase the demand for compact diesel cars in the used car market, unless there is a backlash against diesel cars.
  • Factors, such as standardized dealership experience, good price experience, and high financing cost for used cars, may hinder the growth of the used car market. Some of the major players dominating the market are OLX, Mahindra First Choice Wheels, Cars24, Maruti True Value, and Hyundai H Promise, Droom among others.

Scope of the Report

The Indian used car market is segmented by Vehicle Type (Hatchbacks, Sedan, and Sports Utility Vehicles), Vendor Type (Organized and Unorganized), and Fuel Type (Petrol and Diesel). A new trade channel called customer to customer(C2C) is also gradually coming up into the scenario.

By Vehicle Type
Hatchbacks
Sedans
Sports Utility Vehicles
By Vendor Type
Organized
Unorganized
By Fuel Type
Petrol
Diesel

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Key Market Trends

Organized Channel Expected to Register Higher CAGR

The organized segment in the Indian used car market is expected to witness a CAGR of 22.79% during the forecast period.

The organized sales channel witnessed significant growth in the last three years. This growth is driven by increased sales of used cars in metro cities and a rise in online sales platforms, such as CarDekho, Cars24, and Droom.

The majority of the OEMs have already entered the used car market, and those who have not entered the used car market in the nascent stages have also entered the market during the last five years. Renault started the pre-owned car business in 2015, and Nissan had introduced the firm in 2017.

Significant OEMs in India, such as Maruti Suzuki, Mahindra, Hyundai and Toyota, and luxury car manufacturers, such as BMW, Audi, and JLR, have their used car network.

The majority of these players have witnessed an increase in sales since 2017.

  • For instance, Mahindra First Choice Wheels recorded a healthy sales growth of 40% during 2018-2019, registering revenue of INR 148 Crore.
  • The company has sold more than 250,000 used cars during the same period and aims to increase this figure by 40% by 2020.Currently, MFCW has 1,100 outlets across India. By 2020, the company has been planning to increase the outlets to 1,200, out of which 11 outlets may be dedicated only to the sale of luxury cars.
  • Indian car manufacturing giant Maruti Suzuki also has entered the used cars market with their True Value chain wherein the cars go through various quality tests before they are set up for sale.

Additionally, the online used car sellers registered good sales during 2017-2019. CarDekho has been a pioneer in the online used car market, recording a Y-o-Y growth rate of about 100% over the last three years.

Furthermore, consumers prefer safety, transparency, convenience, and negligible risk while purchasing used cars, which, in turn, provides the organized sector an upper edge compared to the unorganized sector.

India Used Car Trend1

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Growing Demand for Luxury Used Cars

The used car market is witnessing a boom in the country, with the demand for luxury cars continually increasing.

Until few years, owning a luxury car used to be a dream for numerous consumers, owing to financial hurdles, but this is gradually changing, as the consumers can easily buy used luxury vehicles. Heavy depreciation in luxury car prices has made these vehicles, a preferred choice in the used car market. As per OLX, used luxury vehicles priced over INR 15 lakh were the preferred choice among the consumers. According to OLX, over 55,000 luxury cars (priced above INR 15 lakh) were listed on OLX every month and supply for premium cars jumped by over four times in 2017. 

Some major factors driving the growth of the used luxury cars are as follows – high rate of depreciation value of the luxury cars, fast growing base of young population, increasing disposable income of the consumers (along with rapid urbanization), and growing internet penetration in non-metros.

As per automobile dealers, the demand for used luxury cars has been growing at approximately 35% - 40% year-on-year basis, as owners of the luxury cars usually sell off their vehicles after a year or two years, as they desire for upgraded and better models. Additionally, apart from the reasons, majority buyers of these vehicles are from Tier-1 and Tier-2 cities.

On another note, over about 75% of used cars purchased are sedans and hatchbacks due to their practicality and low maintenance costs coma

India Used Car Market Trend2

Competitive Landscape

The market for used cars in India is consolidated, with significant players holding the largest share of the market due to their business models and increased number of pre-owned car retail outlets. The major players include OLX, Mahindra First Choice Wheels, CARS24, Maruti True Value, and Hyundai H Promise

Other players, such as Quikr, Honda Auto Terrace, Ford Assured, and Toyota U-Trust, have been expanding their outlets and operations in the local market. The unorganized sector occupies nearly 80% of the total market.

New company in the block, Big Boy Toyz are in the market with an exclusive luxury, supercars and hypercar lineup of used cars in their inventory. They are currently based in 3 Indian cities and are dealing with about 30 luxury car makers.

Recent developments and Driving forces for the Used Cars Market in India.

With the new emission standards and the Covid 19 pandemic, people are more interested towards self mobility in order to avoid shared transport services keeping in ,ind, the social and physical distancing issues. This has also helped the used cars industry to bounce back by about 99% after the lockdown recovery as compared to 77% of the new cars market.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Hatchbacks

      2. 5.1.2 Sedans

      3. 5.1.3 Sports Utility Vehicles

    2. 5.2 By Vendor Type

      1. 5.2.1 Organized

      2. 5.2.2 Unorganized

    3. 5.3 By Fuel Type

      1. 5.3.1 Petrol

      2. 5.3.2 Diesel

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles*

      1. 6.2.1 CARS24

      2. 6.2.2 Maruti True Value

      3. 6.2.3 Mahindra First Choice Wheels

      4. 6.2.4 Hyundai H Promise

      5. 6.2.5 Honda Auto Terrace

      6. 6.2.6 Ford Assured

      7. 6.2.7 Toyota U Trust

      8. 6.2.8 Big Boy Toyz

      9. 6.2.9 BMW Premium Selection

      10. 6.2.10 Audi Approved Plus

      11. 6.2.11 Mercedes-Benz Certified

      12. 6.2.12 Car Trade

      13. 6.2.13 OLX

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER

**Subject to Availability

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Frequently Asked Questions

The India Used Car Market market is studied from 2018 - 2026.

The India Used Car Market is growing at a CAGR of 15.12% over the next 5 years.

The India Used Car Market is valued at 24 Billion USD in 2018.

  • Cars24
  • Maruti True Value
  • Mahindra First Choice Wheels
  • OLX
  • Big Boy Toyz

Are the major companies operating in India Used Car Market.

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