REPORT DESCRIPTION

Market Size and Overview:

The worldwide online second-hand automobile market achieved a valuation of USD 28.19 billion and anticipates attaining a market scale of USD 75 billion by the conclusion of 2030. During the forecast duration spanning 2024 to 2030, a Compound Annual Growth Rate (CAGR) of 15% is anticipated for market expansion.

Industry Overview

A used car, available for purchase, is commonly referred to as a pre-owned vehicle. Various channels facilitate the sale of used cars, encompassing franchise and independent car dealers, rental car agencies, auctions, private party sales, and leasing offices. Millennials, being mindful of costs and the high expenses associated with car ownership, exhibit reduced overall car purchasing trends. Additionally, the inclination towards cost-effective options leads millennials to opt for used cars, especially for leisure purposes. The heightened cost of new vehicles acts as a deterrent for many potential buyers, creating a demand for older models and encouraging sector players to establish dealership networks in the market.

The used car market is poised for growth due to factors such as the high prices of new cars, affordability concerns, and escalating demand from franchises, leasing offices, and car dealerships for off-lease cars and subscription services. However, unstructured transactions and the absence of standardization impede the global market's expansion. Opportunities for growth are anticipated with the rise of e-commerce, technological advancements, a surge in organized/semi-organized sales in developing nations, the global expansion of electric vehicles, and the increasing demand for car-sharing services.

The significance of online sales has become pivotal in industry development, with online car markets facilitating seamless access to products. Changes in consumer behavior, affordability considerations, the availability of used cars, a surge in demand for personal mobility, and the entry of various online players have contributed to the expansion of the used-car market. For instance, in 2019, eBay Inc. introduced a new eBay Motors application, enhancing the online process for buying and selling used cars.

Market Drivers

High new vehicle prices and affordability concerns drive the growth of used car sales:

The automotive industry notes a surge in demand for advanced car technologies, leading to increased costs of new vehicles. Affordability issues, highlighted by price increases in popular vehicle classes, are steering consumers towards the second-hand market, projecting higher demand for used cars in the foreseeable future.

Rise in demand for off-lease cars & subscription services by franchises, leasing offices, and car dealers:

The growth of the used vehicle dealership industry is propelled by the threat of new entrants and heightened competition. Consumer perceptions of reliability and additional services/quality have evolved, and franchised dealers stand to benefit from OEM engagement, certification programs, and the rising popularity of vehicle subscription services.

Market Restraints

Number of unorganized players in the used cars market challenges growth:

The dominance of unorganized players, particularly in nations like India, China, Thailand, Brazil, and Mexico, hampers the growth of the used automobile industry. Lack of guarantees for used cars and deceptive practices by some vendors pose challenges, creating a sense of caution among potential buyers.

Lack of regularization poses a challenge to market growth:

The absence of regulation is a hindrance to the used car market's growth. Dependence on car owners selling their vehicles, used car imports, and replacement buyers raises concerns about the available supply meeting the demand, especially in the post-pandemic scenario where private transportation is expected to be favored.

Global Online Used Car Market - By Vehicle Type:

• Hybrid
• Conventional
• Electric

The conventional car segment accounted for over 40.0% of shipments in 2021. Alongside hybrid vehicles, the electric vehicle category is poised to experience a significant Compound Annual Growth Rate (CAGR) throughout the forecast period. The affordability of used electric cars over the past few years has been a key driver for the growth of the electric vehicle market. Historical price analyses indicate that used electric car costs have consistently been lower than those of used hybrid vehicles. The surge in used electric vehicle sales can be attributed to technology-driven performance, making electric cars a status symbol and promoting sustainability, particularly in the luxury car market.

Large inventories of conventional gasoline automobiles provide diverse options at a reasonable cost, encompassing various vehicle sizes, including small, mid-size, and SUVs. The increasing concern over climate change and pollution has driven a high demand for alternatives to traditional gasoline-powered vehicles, leading to notable expansion in the market for second-hand electric vehicles.

Global Online Used Car Market - By Fuel Type:

• Compact
• Mid-size
• SUVs

In 2021, the fuel category commanded the highest volume share, nearly 40.0%. The decline in the use of second-hand diesel automobiles is attributed to government restrictions. Over the projection period, considerable expansion is expected in the "others" category. Sales of used compressed natural gas (CNG)-powered vehicles have witnessed a gradual increase, particularly in emerging nations.

Factors contributing to the decline in diesel vehicle sales include emission regulations and the high NOx emissions from diesel engines. Gasoline-powered vehicles, with less strict pollution regulations compared to diesel counterparts, have seen increased popularity. The trend toward petrol automobiles is driven by refined engines, respectable fuel efficiency, powerful top-end performance, and the growing availability of gasoline-powered SUVs.

Global Online Used Car Market - By Region:

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa

Asia Pacific held the largest market share, exceeding 35.0% in 2021, driven primarily by the surging demand for used cars in China. The region is anticipated to witness the highest CAGR growth over the forecast period, propelled by increased used car sales in China, India, and other Asian nations. North America maintained a substantial market share in 2021, with consistent growth expected due to the declining growth in recent years.

The rise of organized businesses offering used automobile trading services has contributed to China's increased market share in the Asian market. Indian auto dealers have embraced technology-enabled solutions, providing mobile applications, virtual showrooms, cloud services, and digital marketing assistance. The Indian used automobile market demonstrates significant potential, while emerging nations like Indonesia, Malaysia, and South Korea exhibit considerable market opportunities.

Global Online Used Car Market - By Companies:

• Alibaba.com
• Asbury Automotive Group
• AutoNation Inc.
• CarMax Business Services, LLC
• Cox Automotive
• eBay Inc.
• Group 1 Automotive Inc.
• Hendrick Automotive Group
• LITHIA Motor Inc.
• Scout24 AG
• TrueCar, Inc.
• Car24
• OLX Cars
• Quikr Cars

Impact of Covid-19 on the Industry:

The global COVID-19 pandemic necessitated temporary reductions in the demand for both new and used automobiles across countries. The resulting global economic recession negatively impacted consumer sentiment, leading to lower automobile sales. However, individuals worldwide increasingly avoided public transportation due to infection risks and to maintain social distancing. Post-lockdown, a discernible trend emerged, with people expressing a preference for private automobiles over taxis and public transit. Research from cars24 indicated a shift towards private vehicle usage and reduced reliance on public transportation.

Despite challenges faced by some automotive companies, the used car market witnessed a significant surge in sales in certain countries during the COVID-19 outbreak. Factors contributing to this increase include decreased income, financial constraints, and a heightened preference for private cars to adhere to social distancing measures.

Notable Happenings in the Global Online Used Car Market in the Recent Past:

• Service Launch (2020): Asbury Automotive Group introduced its end-to-end digital retailing system, Clicklane, in 2020. This platform aimed to enhance the online purchasing experience for used vehicles.
• Business Collaboration (2020): Volkswagen made a significant investment in the used automobile market in 2020 through a partnership between its own used car chain, Das WeltAuto, and various used car platforms.
• Product Launch (2019): In 2019, eBay Inc. unveiled a new eBay Motors application, designed to enhance the online process for selling and buying used cars.