India Used Car Market Size (2024 - 2029)

The Indian used car market is poised for significant expansion, driven by a shift in consumer preferences towards individual mobility and the availability of diverse financing options. The market's growth trajectory has been bolstered by the pandemic's impact on new car sales, prompting buyers to explore used car alternatives. Despite challenges such as high financing costs and a lack of standardization, the market's potential remains robust, with opportunities for growth in the organized sector. The evolving dynamics of buyer behavior, coupled with regulatory changes, are expected to further influence the market's scale and scope in the coming years.

Market Size of India Used Car Industry

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India Used Car Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 31.62 Billion
Market Size (2029) USD 63.87 Billion
CAGR (2024 - 2029) 15.10 %
Market Concentration Medium

Major Players

India Used Car Market Major Players

*Disclaimer: Major Players sorted in no particular order

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India Used Car Market Analysis

The India Used Car Market size is estimated at USD 31.62 billion in 2024, and is expected to reach USD 63.87 billion by 2029, growing at a CAGR of 15.10% during the forecast period (2024-2029).

The COVID-19 pandemic had a minimal impact on the industry. With the increased number of people preferring individual mobility and more finance options available in the used car market, the market is set to grow considerably. Due to the pandemic's reduced cash inflow, buyers have been forced to look for alternatives to new cars, and the used car industry has high growth potential in this regard. As the pandemic has hampered new vehicle sales and production, the used car market is gaining traction among buyers.

Over the long term, the standardised dealership experience, high price experience, and high financing cost for used cars may stifle the market's growth. With the implementation of the new BS-VI emission standards by the Government of India, the technological cost of cars to meet the standards will be borne by consumers. The companies' emphasis on reducing diesel car production is expected to increase demand for compact diesel cars in the price and mileage-sensitive Indian market.

A few years ago, the new-to-used car ratio was 1:1.2, but it is now 1:2.2. When ten new cars are sold, the market has 22 used cars available for purchase. The average holding time of a new car has decreased from 5-6 years to 3 years. The used car category has provided many options for first-time buyers. In terms of buyer preferences and requirements, the trend in the used car market mirrors the trend in the new car market. Buyers in the used car segment, on the other hand, are more likely to try out new brands. This is not the case with new vehicles.

  • Maruti Suzuki, on the other hand, has long been the top choice for used car buyers and has a majority market share in the new car market.
  • Moreover, Only 17% of the market is accounted for by the organised sector. Today, the majority of car purchases and sales are conducted informally.

Although India has seen tremendous growth in the used car market, there is still room for future growth through the organised sector, as the ratio of new cars to used cars in mature markets such as the United States and Europe is 1:3. Overall, the Indian used car market appears to be on the right track.

  • In June 2022, Porsche has made an official announcement that it will launch a used-car business in India on June 8, 2022, under its new sub-division, Porsche Approved. This new business will be launched at the Porsche Centre Kochi in Kerala.

Meanwhile, other German luxury automakers such as Audi, BMW, and Mercedes-Benz already have pre-owned car operations in the country.

However, lack of standardization and awarness among customer may hamper the market growth duirng the forecast period.

Based on Aforementioned Points the target market is expected to grow with a significant rate in the upcoming time-period.

India Used Car Industry Segmentation

A used car, also known as a pre-owned vehicle or a secondhand car, is one that has previously been owned by one or more retail owners.

India's Used Car Market is segmented into Vehicle Type, Vendor Type, and Fuel Type. By Vehicle Type, the market is segmented into Hatchbacks, Sedans, and Sports Utility Vehicles. By vendor type, the market is segmented into Organized and Unorganized. By Fuel Type, the market is segmented into Petrol and Diesel.

By Vehicle Type
Hatchbacks
Sedans
Sports Utility Vehicles (SUV)
By Vendor Type
Organized
Unorganized
By Fuel Type
Petrol
Diesel
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India Used Car Market Size Summary

The Indian used car market is poised for significant growth, driven by increasing consumer preference for personal mobility and the availability of diverse financing options. The market is transitioning from an unorganized to a more structured system, with a growing number of players entering the space. This shift is facilitated by technological advancements that enhance transparency, convenience, and transaction simplicity. The market's expansion is further supported by a rising middle class and a youthful population, alongside steadily increasing disposable incomes. Despite the challenges posed by high financing costs and the need for standardized dealership experiences, the market is expected to continue its upward trajectory, with the organized sector poised for further development.

The demand for used luxury vehicles is also on the rise, with consumers increasingly opting for pre-owned cars due to their affordability and the availability of financing options. The market for these vehicles is expanding beyond major metropolitan areas, reaching tier 1 and tier 2 cities. Key players in the market, such as OLX, Mahindra First Choice Wheels, and Cars24, are implementing various growth strategies to maintain their market positions. These include expanding retail outlets and leveraging technology for vehicle inspections. The introduction of certified pre-owned programs by luxury brands like Volvo and Lexus further underscores the market's potential. As the market evolves, it is expected to mirror trends seen in more mature markets, with a growing ratio of used to new car sales.

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India Used Car Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Drivers

    2. 1.2 Market Restraints

    3. 1.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.3.1 Threat of New Entrants

      2. 1.3.2 Bargaining Power of Buyers/Consumers

      3. 1.3.3 Bargaining Power of Suppliers

      4. 1.3.4 Threat of Substitute Products

      5. 1.3.5 Intensity of Competitive Rivalry

  2. 2. MARKET SEGMENTATION (Market Size in USD Billion)

    1. 2.1 By Vehicle Type

      1. 2.1.1 Hatchbacks

      2. 2.1.2 Sedans

      3. 2.1.3 Sports Utility Vehicles (SUV)

    2. 2.2 By Vendor Type

      1. 2.2.1 Organized

      2. 2.2.2 Unorganized

    3. 2.3 By Fuel Type

      1. 2.3.1 Petrol

      2. 2.3.2 Diesel

India Used Car Market Size FAQs

The India Used Car Market size is expected to reach USD 31.62 billion in 2024 and grow at a CAGR of 15.10% to reach USD 63.87 billion by 2029.

In 2024, the India Used Car Market size is expected to reach USD 31.62 billion.

Used Car Market in India Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)