Used automobile market to be twice the scale of recent automobile peer by FY26

THE PRE-OWNED PASSENGER automobile market may very well be twice the scale of the brand new PV market by FY26, in accordance with analysts and a number of studies masking the sector. For perspective: In FY15, the pre-owned PV market was at about 22 lakh models, whereas the brand new PV market was about 26 lakh models. In response to the OLX-Crisil Auto Examine 2021, the pre-owned market is anticipated to the touch 70 lakh models by FY26.“The preowned market has been outpacing the brand new automobile market, and is anticipated to clock a wholesome development price of 15% in FY22 … prospects proceed to be vivid on the longer horizon, with a 12- 14% CAGR anticipated over the following few years, taking the scale of the market to greater than 70 lakh models by FY26, up from 38 lakh in FY21,” the report famous.

“In distinction, the brand new automobile market is anticipated to develop at a tepid 10% CAGR (which was about 27 lakh models in FY21),” the report added. “The pandemic, digitalisation, altering demographics and aspirations, first-time consumers, and straightforward availability of financing choices are driving sustained development within the pre-owned phase,” an auto analyst instructed FE. The June 2021 ‘Indian Pre-owned Automobile Market’ examine by Frost & Sullivan, commissioned by Volkswagen India, famous that the used automobile market dimension would contact 82 lakh models per yr by FY25.

A examine by Indian Blue E book — the pre-owned automobile valuation web site —has famous that, by FY25, the used automobile market might be 90% bigger than the brand new automobile market, with used automobile gross sales forecast at 71 lakh models.

The OLX report added that digital pre-owned automobile platforms are gaining traction resulting from their wider attain, accessibility, and skill to offer quite a lot of choices, as in comparison with the standard offline pre-owned market. “The share of organised gamers, together with digital platforms, to whole business gross sales is anticipated to develop to 30% by FY26, up from round 20% in FY21. Additionally, the share of auto gross sales via the digital classifieds phase is anticipated to extend from 15% in FY21 to 25% by FY26,” Amit Kumar, CEO, OLX Autos India, instructed FE. “Other than the digital push, the market has obtained a lift from first-time consumers who now account for practically half of all pre- owned vehicles offered in India.

In response to the report, the share of first-time consumers expanded by 8-10% throughout FY21 within the backdrop of the pandemic, resulting from restricted availability of public transport and elevated want for private mobility. Rising urbanisation and nuclearisation of households are anticipated to offer additional impetus to the necessity for private mobility.

The Indian used automobile market is very fragmented. The varied promoting choices are customer-to-customer, unorganised/impartial used-car sellers, semi-organized used-car gamers, and organised (True Worth, Mahindra First Selection, H Promise, and so on, and on-line plus offline gamers corresponding to OLX, Cars24 and Spinny). The Covid- 19 pandemic, in accordance with Kumar, has supplied a serious push to the used-car market. “Previous to the pandemic, with the emergence of ride-sharing platforms corresponding to Ola and Uber, many purchasers had deferred buying a private automobile, particularly in greater cities. However the pandemic introduced the curiosity again on the necessity for proudly owning a private automobile, and this development is unlikely to abate within the close to time period,” Kumar mentioned.