The global used car market attained a size of 115.2 million units in 2019 and is predicted to reach a capacity of 275.3 million units in 2030. According to the forecast of P&S Intelligence, a market research firm based in India, the market would progress at a CAGR of 8.7% from 2020 to 2030. The rapid growth in car ownership rates all over the world is fueling the expansion of the global used car industry.
The other major factors driving the progress of the market are the growing requirement for off-lease vehicles and the rising demand for car subscription services across the world. Off-lease vehicles are increasingly being needed by car dealers, leasing offices, and franchises. The expanding organized sector is another key factor propelling the growth of the used car market. In the developing nations such as India, China, Mexico, and Brazil, the unorganized sector players have historically dominated the industry.
This meant that most of the car deals and transactions were by individuals looking to sell and buy cars. As most of the parties involved in these transactions were individuals rather than firms or organizations, it was very hard to build trust between them. This was one of the main reasons behind the growth of organized players. Besides establishing trust, these players also provide various offers such as free towing at the dealership for expanding their customer base.
These value-added benefits and services are helping the prominent organized players build customer loyalty and increase their revenue. Apart from this factor, the rising popularity of e-commerce and online shopping, owing to the increasing penetration of the internet and the growing usage of smartphones, is also fueling the advancement of the used car market. Because of these technologies, the used car owners are now able to advertise their vehicles and spread information about them easily.
Depending on sector, the market is divided into unorganized and organized. Between these, the unorganized
category is predicted to exhibit faster growth in the market in the forthcoming years, primarily because of the growing propensity of car buyers to shop for certified automobiles from dealers. Additionally, the ballooning usage of online portals by both buyers and sellers in the developed nations such as the U.K., the U.S., Japan, and Germany, is further boosting the growth of the category.
Globally, the used car market is predicted to demonstrate the highest CAGR in the Latin America, Middle East, & Africa (LAMEA) region in the upcoming years. Due to the surging spending power of the people living in the developing countries such as Argentina, Brazil, and Mexico, the players operating in the market are getting numerous lucrative growth opportunities. It is also creating numerous opportunities for individuals and independent dealerships selling their cars.
Hence, it can be concluded from the above paragraphs that the market is set to exhibit rapid advancement all over the globe in the coming years, mainly because of the growing requirement for used cars, the rising operations of organized sector players, and the increasing home ownership rates around the world.