Influx of new vehicles fuelling demand in pre-owned segment
Vijay C Roy
Tribune News Service
Chandigarh, August 7
The pre-owned cars segment is growing like anything surpassing the new car sales, thanks to the influx of younger vehicles that have expanded the range of options available to buyers. As a result, according to the industry, the market size will quadruple from USD 25 billion to an impressive USD 100 billion by 2034.
A few years ago, customers in India typically sought vehicles that were 10-11 years old. However, over the past five years, the average age of sought-after cars has decreased to just 5-7 years.
“Many people are choosing to sell their cars in favour of newer models with cutting-edge automotive technology. The desire for enhanced features, better fuel efficiency, and lower maintenance costs are driving factors behind this trend. As a result, we are seeing a shorter ownership cycle, now averaging 5-7 years compared to the previous 8-10 years,” said Gajendra Jangid, Co-founder & CMO, Cars24.
Auto insiders also mentioned that a surge in demand for “young” pre-owned vehicles (4-7 years old) has outpaced supply initially, however, in the past few years, the gap has been narrowed.
Compare to new cars sales where SUVs dominates, the pre-owned car segment is dominated by hatchbacks, capturing 60% of the market. However, there is a notable shift towards SUVs, reflecting a growing preference for more robust and spacious vehicles. Currently, sedans hold 21 per cent of the market share, while SUVs are close behind at 19 per cent.
On being asked about the factors propelling the demand, Gajendra said, “Several factors are driving the demand for used cars in India. Consumers recognize that pre-owned cars offer substantial savings, providing similar functionality and reliability at a fraction of the cost of new vehicles, making them an attractive option for budget-conscious buyers.”
Chandigarh-based car retailer Amitoj Singh said, “The demand for pre-owned segment is fueled by rising disposable incomes, attractive financing options, and hassle free transaction.”
