The Indian used-car market is set to leap from a value of Rs 2.1 trillion in FY23 to Rs 5 trillion by FY28, and a volume increase from 4.6 million units in FY23 to 8.5 million units in FY28, growing at a value-CAGR of 18% and volume-CAGR of 13%, respectively, according to the OLX Mobility Report.“Contrastingly, the new-car market, despite achieving a historic 27% growth in FY23 with 3.9 million units sold, anticipates a moderated growth pace of 6-8% in FY24,” Siddharth Agrawal, country head, marketing, OLX India, told FE.Agrawal added that the rise in sales of pre-owned utility vehicles (UVs) is propelling this growth.
“In the used-car market, UVs are expected to grow 2x, increasing their market share from 21% in 2023 to 41% by 2028. This shift aligns with the broader trend observed in the new-car market, where UVs have been steadily gaining popularity,” he said. According to him, the supply of UVs like Hyundai Creta, Maruti Suzuki Brezza, Ford EcoSport and Mahindra XUV500 is increasing in the used-car space, and newer models such as Tata Nexon and Kia Sonet are also starting to make their mark.Agrawal added that used UVs such as the Creta, Brezza, EcoSport and XUV500 are taking away sales from new small hatchbacks such as Maruti Suzuki Alto and S-Presso, and Renault Kwid.“Even though, let’s say, a pre-owned Creta is a bit more expensive than a new Alto, people are choosing pre-owned UVs, including SUVs, over brand-new hatchbacks,” Agrawal said. He said that the reason is that even though these are old, people are getting features such as connectivity, space, power, and a pre-owned SUV still has better aspirational value than a new, small hatchback.