Indians are buying more pre-owned cars: Scorpio, Fortuner among the top picks
- Scorpio, Fortuner and other SUVs are among the most popular second-hand cars being bought by Indians, says OLX Group India CEO.
- However, the demand for small cars like Swift, i10, WagonR continues to be robust.
- The market for pre-owned cars is growing faster (15%) than the new car market (10%).
AdvertisementIndian customers are showing a greater preference for purchasing pre-owned cars as rising input costs and inflationary pressures make buying a new car an expensive proposition.
Scorpio, Fortuner and other SUVs are among the most popular choices of Indians, as the demand for these pre-owned cars shot up by more than 150% in 2021 from 2019 levels, Amit Kumar, CEO at OLX Group India, told Business Insider India in an interview.
Small cars like Swift, i10 and WagonR continued to dominate the sale of pre-owned cars – with their share rising to 45-55% of the total pie in 2021 from 40-50% in 2019. In the western region, hatchbacks constituted as much as 60% of the total sales in 2021, he said.
Demand improvement was more pronounced in the south followed by the west, while it was relatively lower in the east even post lockdown, Kumar said. Interestingly, the concept of buying used cars is now gaining momentum 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 saw a price increase as well for these used cars,” Kumar further added.
The market for pre-owned cars is growing faster (15%) than the new car market (10%) in terms of CAGR. The used-car market is poised to be 1.5 times larger than the new car market by FY26, according to a study by OLX Autos and CRISIL.
A report by Car24 also highlighted that millennials and GenZs were the biggest buyers of used cars, registering a growth of 71% and 57% respectively in 2022 compared to a year earlier.
Pre-owned luxury cars see demand in tier 2, 3 cities
“We saw an astounding growth in demand for luxury cars in tier 2 cities, as compared to tier 1 cities. The growth in demand in tier 2 cities was 45% in 2021, whereas it was 40% in tier 1 cities,” Kumar said.
He further explained that this was mainly because the luxury car market in tier 2 cities benefited from a low base as compared with tier 1 cities.
The company also published a report on pre-owned luxury cars after analyzing over 50,000 luxury car listings made on the platform in the January to June period.
In the report, OLX Autos noted that the demand for pre-owned luxury cars witnessed a sharp increase 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 benefitting from this trend. Its competitor Spinny also witnessed high demand for Mercedes C class, BMW 3 series and Audi Q3 on its newly launched luxury car portal in the second quarter of 2022.
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