Used Car Market Size, Share & Trends Report

Used Car Market Size, Share & Trends Analysis Report By Vehicle Type (Hybrid, Conventional, Electric), By Vendor Type, By Fuel Type, By Size, By Region, By Sales Channel, And Segment Forecasts, 2020 - 2027

  • Published Date: Sep, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68039-119-7
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 100

Report Overview

The global used car market size was valued at USD 1,332.2 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2027. The used car shipment was recorded at 102.8 million units in 2019. The market has shown significant growth in the last few years, as the price competitiveness among the new players has been one glowing spot in the used car industry. The inability of customers to buy new cars became one of the reasons for the growing sales of used car volume, which is complemented by the investments made by the industry participants to establish their dealership network in the market. These dealership networks helped market participants to brand and make used car options viable. Further, the role of online sales has become a critical growth factor in the market. Online sites in auto marketplaces have played an essential role in bringing access to consumers with a single touch. A combination of such developments created a significant upsurge in the used car demand.

Asia Pacific used car market size

Until recently, automobile manufacturers and dealers have mainly focused on their new vehicle business with the exclusion of used cars, often viewed used cars as a byproduct. However, the competition in the market and the threat of new entries have created a great extent of an upsurge in the used car dealership. Moreover, the added quality and reliability of used cars changed the consumer attitude and increased the sales of the used passenger cars. Investing in used car management has become one of the market's requirements characterized by slimming margin, relentless competition, and demanding consumers.

The technology advancement such as the development of the internet, introduction of hybrid and the electric vehicle has changed the buyer position in the market. Moreover, consumers are now knowledgeable about the vehicle, their residual value, quality finance charges, availability, the price applied, and sometimes the profit margin that the seller makes in a closing deal. This knowledge has changed the dynamics and managed to turn customer intelligence to their advantage. Resultantly, consumers are more inclined towards buying the used cars nowadays.

Some of the key factors, including transparency and symmetry of the information among the consumers and buyers, the online sales channel growth, certified used vehicle programs, and the strong position of franchise dealers play a vital role in driving the growth for used cars. In both developed and developing countries, the used to new vehicle ratio has increased in the last few years, accounting for the reasons stated earlier. In addition, franchised dealers with support from OEM involvement in certification and marketing programs, online inventory pooling, and access to high-quality contracts are in a strong position to benefit from the growth in the used car market.

The COVID-19 (Coronavirus Disease) pandemic has placed the automotive industry at great disruption. In the aftermath of the pandemic, the consumers are expected to prefer private conveyance. However, the financial disparities will be expected to hamper the purchase of new vehicles; due to budget constraints, commuters are expected to opt for the used cars. Further, virtual reality, online, or digitally generated sales leads buy new vehicles in this pandemic period.

Due to pandemic, the hybrid and electric vehicles are expected to battle in the market for the next two or two years due to the current economic conditions. Though the pandemic's impact on the automotive market will augment the demand for mid-size vehicles, quality compacts are expected to complement the same. On a bigger scale, in developing countries, the pandemic is expected to be a reason for the comeback of some entry-level used compact cars in the market. The market will als0o expected to vary with the demand from different segments of customers as every class segment has its own preferences to opt for a vehicle.

Vehicle Type Insights

The conventional vehicle segment is accounted for the 44.3% share, in terms of shipment, in 2019. The electric vehicle segment is expected to register a significant CAGR over the forecast period, complemented by the hybrid vehicle. In the last few years, used electric vehicle prices continue to remain viable for consumers, and this plays a significant driving factor for electric vehicle sales. According to the last few years’ price analysis, used electric vehicles priced has been lowered than the used hybrid vehicles. Electric vehicle traits such as technology-driven performance, in the luxury vehicle segment, provide a status symbol, and support sustainability create a huge volume demand for used EVs.

Conventional gasoline vehicles with large inventory offer multiple choices at an affordable price. This segment of vehicles accounted for the maximum share in all sizes, including compact cars, mid-size, and SUV car market. Further growing concern toward climate change and increasing pollution has created a great demand for substitute of the conventional gasoline vehicle. Hence, there has been a significant growth registered by the electric used cars in the market.

Vendor Type Insights

The organized vendor segment is accounted for the largest volume share of 71.8% in 2019. This is attributed to the increasing number of franchised dealers in the market. The entry of new players in the market and new retail models also became a factor in driving the growth of the market. According to the NADA, in the U.S., franchised dealers earned higher gross profits on used vehicle sales than independent dealers. In addition, the organized vendors benefited from greater consumer loyalty to the brand across all age groups.

The organized vendor segment is expected to register high growth over the forecast period. The segment is accepted to hold more than two-thirds of the market in the coming years. With many dealers across the globe, the market is highly fragmented. However, in developed countries such as the U.S., Germany, the U.K., and others, there are some top dealers such as CarMax Business Services, LLC, Asbury Automotive Group, and others those account for more than half of the volume in the market.

Fuel Type Insights

The petrol segment accounted for the largest volume share of 43.1% in 2019. This is attributed to the declining usage of diesel vehicles, as the government discourages the purchase of used diesel vehicles. The Other fuel segment is expected to register significant growth over the forecast period. In developing countries, CNG gas vehicles are also have shown a sustainable upsurge in used vehicle volume sales.

Emission standards for the positive ignition (gasoline, NG, LPG, ethanol) and compression ignition (diesel) vehicles have become one of the reasons for the slump in sales of diesel vehicles. Moreover, excessive emission of NOx by the diesel engine attributed to the decline in diesel engine vehicle sales and an increase in the substitute market. The petrol-fueled car emission standard is less stringent compared to diesel-fueled passenger cars. Furthermore, petrol cars with a refined engine, decent fuel efficiency, and strong top-end performance attracted a large consumer base in the last few years and expected to continue with the same in the coming years. In addition, increasing inventory for petrol-based SUVs also became one of the driving factors of the petrol fuel used car segment.

Size Insights

The compact size segment accounted for the largest volume share of 42.2%  in 2019. This is attributable to people's preference for economical and compact size vehicles. Compact size vehicles with a high production rate and huge inventory have been preferred among the franchised owners. Easy availability with affordable prices fueled the demand for the used compact vehicle in the last few years. However, with changing consumer preferences and advancement in SUVs, the used SUVs have shown significant growth and are expected to continue in the coming years.

With the changing landscape in the automotive market, the SUVs segment has caused the downfall of other segments. Offering space and size while remaining the compact compared to the off-road vehicles, SUVs are considered as ideal drives by the buyers nowadays in various regions. With great demand and a wider supply network, the residual value for SUVs is higher nowadays for the market. Europe region has registered significant demand traction for the used SUVs market.

Sales Channel Insights

In 2019, the offline sales accounted for the largest volume share of 78.3%. This is attributable to the consumer preferences towards the conventional mode of buying. However, the online sales channel segment is expected to register significant growth over the years. The development of online tools for sellers and buyers has made the market more competitive. In addition, online availability of information including prices, review, specifications, and others, lead to significant growth by dealers. 

Global used car market share

Online dealers are empowering digital, savvy customers with complete end-to-end purchasing capabilities, unique delivery options, and extensive vehicle photos and data with search tools. With the usage of technically advanced tools integrated with artificial intelligence and machine learning technology, dealers are booming their network and customer base. AI applications can evaluate the data stored in the dealer management system and aid in refining the marketing and sales and strategies by modifying the car buying experience. For instance: the use of online sales channels Alibaba.com, eBay, CarMax, mobile.de, and others play a vital role in country-specific growth targeting domestic customer base.

Regional Insights

The Asia Pacific accounted for the largest share of 35.6 % in 2019, in terms of shipment, majorly due to the rapid growth of demand in China for the used vehicles. Meanwhile, the North America region also held a notable market share and is expected to witness steady growth owing to the plummeted growth in the past few years. On the other hand, Asia Pacific is projected to demonstrate the highest CAGR over the forecast period. This is attributed to the increasing sales of the used car in China, India, and other Asian countries.

In the Asia Pacific region, China with the rising number of organized players with used car trading services has expanded its market footprint in the Asian market. Some of the Indian car dealers provide a rich array of advanced technology-enabled tools, which include mobile-based applications, a virtual online showroom, cloud services for lead managements system, tracking sales performance, and digital marketing support. Moreover, this extent of advancement in the Indian used car industry creates great opportunities for the consumer base. Within the region, Indonesia, Malaysia, Indonesia, South Korea, and other developing countries have shown significant potential for the market.

Key Companies & Market Share Insights

The key players in the global market are focusing on increasing the customer base to gain a competitive edge in the market. Thus, vendors are taking several strategic initiatives, such as collaborations, acquisitions and mergers, and partnerships. For instance: in 2020, Volkswagen announced the major investment in the market by a collaboration of its own used-car chain, Das WeltAuto, with various used car platforms. Mainstream automakers have also been expanding their presence in this space with their pre-owned car sales networks like Maruti Suzuki's True Value, M&M Mahindra's First Choice Wheels, and Toyota's U Trust, among others. Some of the prominent players in the used car market include:

  • Alibaba.com

  • Asbury Automotive Group

  • AutoNation Inc.

  • CarMax Business Services, LLC

  • Cox Automotive

  • eBay Inc.

  • Group 1 Automotive Inc.

  • Hendrick Automotive Group

  • LITHIA Motor Inc.

  • Scout24 AG

  • TrueCar, Inc.

Used Car Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 1,402.0 billion

Revenue forecast in 2027

USD 2,150.6 billion

Growth Rate

CAGR of 5.5% from 2020 to 2027

Base year for estimation

2019

Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Revenue in USD billion, shipment in million units, and CAGR from 2020 to 2027

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segment Scope

Vehicle type, vendor type, size, sales channel, fuel type, region

Region scope

North America; Europe; Asia Pacific; South America; MEA

Country scope

The U.S.; Canada; Germany; The U.K.; France; Spain; China; Japan; India; Brazil

Key companies profiled

Alibaba.com; Asbury Automotive Group; AutoNation Inc.; CarMax Business Services, LLC; Cox Automotive; eBay Inc.; Group 1 Automotive Inc.; Hendrick Automotive Group; LITHIA Motor Inc.; Scout24 AG; TrueCar, Inc.

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Segments Covered in the Report

This report provides forecasts for revenue growth at the global, regional, and country levels and analyses of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For this study, Grand View Research has segmented the global used car market report based on vehicle type, vendor type, size, sales channel, fuel type, and region.

  • Vehicle Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • Hybrid

    • Conventional

    • Electric

  • Vendor Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • Organized

    • Unorganized

  • Fuel Type Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • Petrol

    • Diesel

    • Others

  • Size Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • Compact

    • Mid-Size

    • SUVs

  • Sales Channel Model Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • Online

    • Offline

  • Regional Outlook (Shipment, Million Units; Revenue, USD Billion, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

    • Europe

      • Germany

      • The U.K.

      • France

      • Spain

    • Asia Pacific

      • China

      • Japan

      • India

    • South America

      • Brazil

    • The Middle East and Africa (MEA)

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