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The emergence of shared mobility players like OLA and Uber made many customers to defer purchasing personal vehicles especially in metro cities.
According to a study, the Indian used car market is expected to touch a size of more than 70 lakh vehicles by 2025-26, up from 38 lakh in 2020-21. Over the next few years, it is expected to grow at around 12 to 14%. The pre-owned car industry is expected to clock a growth rate of 15% in FY22 as the Covid-19 pandemic, digitisation, changing demographics and aspirations, first-time buyers, and availability of financing options are acting as drivers of growth.
The study, OLX Autos-CRISIL Study 2021, added that on the longer horizon, the prospects continue to be bright, with a 12 to 14% CAGR expected over the next few years, taking the market size to more than 7 million vehicles by FY26, from3.8 million units in FY 21.
Pandemic brought back interest of owning personal vehicles
During the pandemic, the study found that many people preferred socially-distanced personal mobility, the pre-owned car market is expected to continue to be a sunrise sector.
The study also highlighted that the pandemic has had an impact on the market and consumer behaviour, which brought back the interest for owning personal vehicles and this trend is unlikely to come down in the near term.
It added that the emergence of shared mobility players like OLA and Uber made many customers to defer purchasing personal vehicles especially in metro cities.
The study said that the supply crunch, increased demand impacted stock (of pre-owned cars) level across regions, mainly in the South and the West where inventory levels came down to 30-35 days fro the typical 45-50 days during the first wave.