- Scorpio, Fortuner and other SUVs are among the most popular used cars bought by Indians, says the CEO of OLX Autos.
- However, demand for small cars such as Swift, i10 and WagonR remains robust.
- The used car market is growing faster (15%) than the new car market (10%).
Indian customers show a greater preference for buying used cars, as rising input costs and inflationary pressures make buying a new car an expensive affair.
Scorpio, Fortuner and other SUVs are among the most popular choices by Indians as demand for these used cars increased by more than 150% in 2021 compared to 2019, Amit Kumar, CEO at OLX Autos, told https://londonbusinessblog.com/ India in a statement. interview.
Small cars like Swift, i10 and WagonR continued to dominate used car sales – their share rose to 45-55% of the total pie in 2021, from 40-50% in 2019. In the western region, hatchbacks made up as much as 60% of total sales in 2021, he said.
The improvement in demand was more pronounced in the south, followed by the west, while even after the lockdown it was relatively lower in the east, Kumar said. Interestingly, the concept of buying used cars is now gaining traction in tier 2 and 3 cities as well.
“The Covid-19 pandemic has led to an increase in demand for used cars and so we also saw a price increase for these used cars,” Kumar added.
The used car market is growing faster (15%) than the new car market (10%) in terms of CAGR. According to a study by OLX Autos and CRISIL, the used car market will be 1.5 times larger than the new car market by FY26.
A report from Car24 also highlighted that millennials and GenZs were the largest used car buyers, growing 71% and 57% respectively in 2022 compared to a year earlier.
Pre-owned luxury cars see demand in tier 2, 3 cities
“We saw amazing growth in luxury car demand in tier 2 cities, compared to tier 1 cities. Demand growth in tier 2 cities was 45% in 2021, while it was 40% in tier 1 cities,” said Kumar.
He went on to explain that this was mainly because the luxury car market in tier 2 cities benefited from a low base compared to tier 1 cities.
The company also published a used luxury car report after analyzing more than 50,000 luxury car advertisements placed on the platform from January to June.
In the report, OLX Autos noted that demand for pre-owned luxury cars increased sharply in the first half of 2022, with BMW being the top favourite, followed by Mercedes Benz, Audi, Jaguar and Porsche.
OLX is not alone in benefiting from this trend. Competitor Spinny also saw strong demand for Mercedes C-Class, BMW 3 Series and Audi Q3 in the second quarter of 2022 on its newly launched luxury car portal.
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