Used Car Market: Petrol Segment Accounted For The Largest Volume Share

 Used Car Industry Overview

The global used car market size is expected to reach USD 2.67 trillion by 2030, according to a new report by Grand View Research, Inc. The market is anticipated to expand at a CAGR of 6.1% from 2022 to 2030. Rising technological advancements such as the implementation of digital technology in the market and the use of artificial intelligence to improve the online buying experience are expected to boost the market demand over the forecast period. Some of the other factors such as transparency between the owner and buyer and certified used vehicles programs also impacted the market for used cars. Furthermore, the growing adoption of used electric and hybrid cars has become one of the noticeable trends in the last few years. The increased number of new Electric Vehicles (EVs) and hybrid cars registered over the last few years is now flowing through into the market. For instance, European countries such as Germany, the U.K., Spain, and Austria have witnessed significant volume sales of petrol, EVs, and hybrid vehicles.

Globally, the growth of online sales channels also changed the overall consumption of used cars. As online automotive retailing accounts for a small percentage of total used car sales, there is a significant growth potential for this segment. Moreover, automotive dealers use their websites as a sales and marketing generation channel to drive buyers to the showroom floor where the consumers complete the purchase. However, nowadays, consumers are looking for e-commerce options for their entire purchases. Moreover, there is a rise in the number of digital sellers, such as Vroom; Carvana Inc.; eBay Motors; and Shift Technologies Inc., that specifically cater to online vehicle buyers and increase the competitiveness of the market.

Escalating investment in the SUV segment is also one of the key reasons, which caters to the demand traction in the market. Luxury brands have invested in launching vehicles in the SUV segment to add to their existing sports collection inventory. With the availability of a supply chain network of second-hand cars in the market, significant traction is expected in terms of volume sales in the market. Additionally, the significant change in people's transportation habits such as opting for individual mobility with their own vehicle is expected to create a great upsurge in the market.

Further, the COVID-19 outbreak will increase the demand for compact and midsize cars at affordable prices. With the fear of getting infected, people are opting for private transportation rather than public transportation. This is one of the key driving factors for the used car sales during this pandemic period and its aftermath. Furthermore, one of the notable phenomena emerging nowadays is the sales of petrol vehicles as fossil fuels are cheaper with the outbreak. In addition, the impact of COVID is visible in the automotive industry with the sales surge in the market for used cars despite plummeting growth in the new car sales segment. The majority of the customers are looking for more affordable means of transport that would be safe, and reasonable to buy (both ergonomically and economically). This also leads to the demand for entry-level used compact segments of cars. With employment uncertainties and variable cash flows in the economies, individuals would prefer used cars over new cars.


Used Car Market Segmentation

Grand View Research has segmented the global used car market based on vehicle type, vendor type, fuel type, size, sales channel, and region:


Based on the Vehicle Type, the market is segmented into Hybrid, Conventional, and Electric.

  • The conventional vehicle segment accounted for a share of over 40.0%, in terms of shipment, in 2021. 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.
  • 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 cars. Further, growing concerns over climate change and increasing pollution have created a great demand for a substitute for conventional gasoline vehicle. Hence, there has been significant growth registered by the electric used cars in the market.

 


Based on the Vendor Type, the market is segmented into Organized, and Unorganized.

  • The organized vendor segment accounted for the largest volume share of over 70.0% in 2021. 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 emerged as a key factor in fueling the growth of the market.
  • The organized vendor segment is expected to witness 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.

 

Based on the Fuel Type, the market is segmented into Diesel, Petrol, and Others.

  • The petrol segment accounted for the largest volume share of over 40.0% share in 2021. This is attributed to the declining usage of diesel vehicles as the government discourages the purchase of used diesel vehicles. The others segment is expected to witness significant growth over the forecast period. In developing countries, CNG powered vehicles have also 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 can be 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.

 

Based on the Size, the market is segmented into Compact, Mid-Sized, and SUV.

  • The SUV size segment accounted for the largest volume share of over 35.0% in 2021. With the changing landscape in the automotive market, the SUVs segment has caused the downfall of other segments. Offering space and size while remaining compact compared to off-road vehicles, SUVs are considered ideal drives by buyers nowadays in various regions.
  • The compact size segment is expected to register a significant CAGR over the forecast period. This is attributed 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.

 


Based on the Sales Channel, the market is segmented into Offline, and Online.

  • The offline sales accounted for the largest volume share of over 75.0% in 2021. This is attributed to the consumer preference for the conventional mode of buying. However, the online sales channel segment is expected to witness significant growth over the years. The development of online tools for sellers and buyers has made the market more competitive. 
  • 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 intelligenceand machine learning technology, dealers are booming their network and customer base.

 

Key Companies & Market Share Insights

The key players in the market are focusing on expanding the customer base to gain a competitive edge in the market. Thus, vendors are taking several strategic initiatives, such as collaborations, acquisitions & mergers, and partnerships. For instance, in 2020, Volkswagen announced a major investment in the market for used cars 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. Some prominent players in the global used car market include:

  • 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.

 

Order a free sample PDF of the Used Car Market Intelligence Study, published by Grand View Research.

About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.

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Grand View Research, Inc.

Phone: 1-415-349-0058

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