According to CARS24 CEO and Co-Founder Vikram Chopra, the Indian used car market is expected to touch the $100 billion mark in the next 10 years, on the back of rising disposable incomes and a growing middle class.
The Gurugram-based online used car marketplace has seen changes in market dynamics, with customers opting for frequent upgrades regarding cars, according to the findings.”
“According to our internal study, the anticipated growth of the Indian used car market is set to occur at a 15% CAGR, up from 25 billion dollars in 2023 to 100 billion dollars by 2034,” Chopra told the media in an interaction.
The growth trajectory is propelled by various factors unique to the Indian market, including urbanisation and a growing middle class, which is changing consumer preferences and boosting the demand for affordable mobility solutions, he added.
When CARS24 began its journey eight years ago, the used car market size stood at around 10-15 billion dollars, the CARS24 CEO added. “I think, in the last 3-4 years, with different kinds of cars coming up, the market has truly accelerated,” he stated.
Car ownership in the nation remains low as compared to various developed geographies, he said. In the United States of America and China or in Europe, 80-90% of the population has a car while in India only around 8% of the population owns a four-wheeler, he added. “So we still have a long way to go from here,” Chopra said.
Another prominent indicator of the adoption of the used cars trend is the shortened ownership cycle, as the younger generation is opting to sell their cars within 5-6 years of purchase, in stark contrast to the patterns observed two decades ago when vehicles were typically held for 10-12 years, he noted.
“As millennials increasingly opt for more frequent car upgrades, the market is witnessing a consistent inflow of high-quality, aspirational cars,” Chopra said.
Further, he noted that the demand for feature-packed SUVs has also surged in the last four years, experiencing significant growth from 30% in FY19 to 59% in January to June 2024.
The SUV-centric trend has extended beyond new car acquisitions and is making its presence felt in the used car market with a 4-6% growth since FY21, Chopra said.
“Our internal analysis indicates a 14 per cent surge in the sales of cars valued above Rs 8 lakh between 2018 and 2023. This shift is intricately tied to increasing income levels and the expanding middle class, influencing the changing landscape of the market,” he stated.
Besides, while metropolitan cities accounted for 65% of pre-owned cars supply in FY22, there is a strong inclination towards used cars in non-metro cities, and the demand is expected to swell at a rate of 30% Compound Annual Growth Rate (CAGR) by FY27, he added.
Chopra noted that CARS24 also expects used electric vehicles to become available in the market within the next five years to meet the growing demand.