Used Vehicle Market Growth Continues Amid Changing Consumer Preferences
The global used vehicle market, characterized by its remarkable growth trajectory since the 2008 recession, is poised to continue its upward trajectory. A comprehensive analysis of various facets of this dynamic market reveals promising trends and challenges. These insights are expected to provide invaluable assistance in examining market growth over the forecast period.
Market Overview
The global used vehicle market, which was valued at over US$1.5 trillion in 2021, demonstrates resilience and robust expansion. Key findings indicate a shift in consumer preferences, with the average age of a used vehicle in the US standing at 11.8 years. In 2020, a staggering 40.4 million used vehicles were sold in the US, surpassing new vehicle sales at 14.5 million. The top-selling used car brands in the US include Toyota, Honda, and Ford, showcasing the diverse choices available to consumers. The Asia Pacific region is expected to make significant strides in the market, driven by factors such as higher disposable incomes and urbanization.
Driving Factors
The International Organization of Motor Vehicle Manufacturers (OICA) reports that the automotive industry contributes approximately 4% to global GDP, with projections of a 20.78% CAGR by 2028. This data underscores the increasing global car ownership trend, where used cars play a significant role. Despite the rise of new entry-level cars, used vehicles remain a preferred choice for first-time buyers seeking affordability and reliability.
Franchise dealers are capitalizing on this trend by offering better financing schemes and expanding their used vehicle dealership networks. Online sales of pre-owned cars also contribute significantly to market growth. However, financing options for used cars remain a challenge, potentially hindering growth.
Segment Insights
Compact passenger cars lead the market in volume share due to consumer preferences for economic and compact vehicles. SUVs, known for their versatility, are also in demand. The distribution network and residual value for SUVs are relatively high, contributing to their growing popularity.
Key Players
Global automotive giants are actively entering the used vehicle market, recognizing its potential and shifting consumer behavior. Luxury car brands such as Mercedes and Audi have established their used car dealerships, generating substantial revenue. Brands like Toyota’s U Trust and Maruti Suzuki’s True Value cater specifically to the used car market. Collaboration activities and strategic expansion efforts are prevalent among mainstream companies.
Challenges and Opportunities
The rise of ride-sharing poses a challenge to the used vehicle market, potentially reducing transaction volumes. However, the onset of COVID-19 has increased demand for private conveyance, benefiting the used vehicle market, especially in developing economies.
Regional Growth
North America is expected to maintain a significant share of the global used vehicle market, driven by an extensive dealer presence, favorable economic conditions, and a preference for SUVs and trucks. In contrast, the Asia Pacific region is set for substantial growth, owing to factors such as rising incomes, urbanization, and improved financing options.
Key Market Players
Prominent companies in the global used vehicle market include TrueCar, Droom Technology Pvt Ltd., CarMax Inc., Penske Automotive Groups, Lithia Motors, Pendragon PLC, and Emil Frey Classics AG. These players focus on new product launches, partnerships, collaborations, acquisitions, and alliances to gain a competitive edge.
Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2023-2030 – By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa) https://www.fairfieldmarketresearch.com/report/used-vehicle-market
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