Market Trends of Spain Used Car Industry
This section covers the major market trends shaping the Spain Used Car Market according to our research experts:
Rising Demand for Used Cars Over New Cars to Enhance Growth of Market
Over recent years, the demand for used cars is rising significantly and is expected to have decent proliferation over coming years in wake of changing perspectives of consumers as no longer secondhand cars are stereotyped with downsized social status. Also, entry-level used cars are perceived to be safer than two-wheelers as they are less prone to accidents. Hence there is a shift towards used car buying resulting in greater customer pull. Besides these, preference for personal mobility in the post-COVID period has also been a positive factor supporting this trend.
- In February 2020, Spain's registrations fell 4.8 percent in 2021 with sales of new cars to private customers declined by 12 percent. However, there was a 17 percent leap in demand for vehicles over 20 years old. This decline in sales of new cars and growth of old cars is expected to create a positive outlook for the used car market.
In addition, the incentives offered by the government to replace older IC engine vehicles with newer ones prompted to encourage used car dealers to adopt latest electric cars into their fleet, and such instances are expected to help dealers to expand their fleet with latest models. For instance,
- In 2019, the Spanish government adopted the new edition of its electric mobility subsidy program. The program offers subsidies for the purchase of electric vehicles and plug-in hybrids, if a combustion motor vehicle at least ten years old is decommissioned. Then Spain grants 5,500 euros (+ 1,000 euros dealer bonus) for purely electric cars, but their list price may not exceed 48,400 euros.
With the rise in repalcement of older IC engine vehicles with new electric vehicles by fleet operators is anticipated to drive the influx of used cars in the market, which is likely to reduce the overall cost of used vehicles. Further, with the shoratge of new vehicles in the market, the demand for used cars is anticipated to witness steady growth during the foreacst period.
Online Booking Segment Likely to Play Key Role in the Market
The online booking segment of the market is expected to occupy a predominant position in the market during the forecast period. Consumers are moving away from traditional techniques and increasingly using internet platforms to acquire and sell used cars. Many European start-ups and auto portals are increasing their presence in Spain through mergers and acquisitions, collaborations, and various other growth strategies recognizing the industry's potential.
In addition, growing internet and smartphone penetration is encouraging the majority number of consumers to opt to buy and sell cars through online auto classifieds and social media. For instance, There were 42.54 million internet users in Spain in January 2021, and the number of internet users in Spain increased by 144 thousand (+0.3%) between 2020 and 2021. The development of online tools for sellers and buyers has made the market more competitive. In addition, the online availability of information including prices, reviews, and specifications leads to significant growth by dealers.
With the usage of technically advanced tools integrating the latest technologies like artificial intelligence and machine learning, dealers are booming their network and customer base. AI applications can evaluate the data stored in the dealer management system and aid in refining the marketing and sales strategies by modifying the car buying experience. For instance, the use of online sales channels such as CarMax, impel, seez, and others are playing vital role in country-specific growth in the market by targeting the domestic customer base. Various online channels modify their platforms to offer seamless car selling and buying experiences.
