BackUsed vehicle market to be twice the new vehicle segment by FY25, report
Small towns are expected to fuel the demand for used vehiclesIndia recorded a total sale of 4.4 million used vehicles as compared to 2.7 million new vehicles in FY20
PremiumThe pre-owned vehicle market in India is expected to reach 8.2 million units by FY26, a two-fold increase from approximate 4 million units in FY21. India recorded a total sale of 4.4 million used vehicles as compared to 2.7 million new vehicles in FY20. However, the used vehicle market growth was only marginal as against 4 million sold in FY19, on the back of short supply.
"The financial year 2021 has witnessed many transitions impacting the financial health of new vehicle ecosystem in the short term. During the same time, the transition and change in consumer preferences has fast-tracked the pre-owned vehicle market on the path to growth. The buyer is now more open to owning a pre-owned vehicle than ever before," said Saket Mehra, Partner and Auto Sector Leader, Grant Thornton Bharat.
The cost of ownership for a pre-owned/used vehicle significantly less in comparison to a new one and this is mainly due to high depreciation, higher taxes, RTO/registration fee, and expensive vehicle insurance policies.
Indian used vehicle market size is expected to rise to USD 70.8 billion by 2030 at a 14.8% CAGR between 2021 and 2030. Small towns are expected to fuel the demand for used vehicles as the share of non-metro cities in used vehicle sales is expected to rise to nearly 70% from the current 55% in the next 4 years. The Indian market possesses tremendous potential for the four-wheeler passenger segment, particularly pre-owned cars. Used vehicle market to be twice as big as new vehicle segment by FY25. Affordability is the main factor influencing purchase decisions.
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