Two used-cars will be sold for every new car sold in India by FY'26: Report1 min read . Updated: 27 Jul 2021, 01:58 PM IST
Economic and financial uncertainty due to pandemic-induced lockdowns has led to a rise in demand for used-cars.
- An increased preference for personal mobility and an upswing in prices of new cars have also contributed to the growth of used-car market.
The used-owned car market in the country is set to more than double to 8.2 million units or $47 billion over the next five years or by FY'26 from the current 4 million units, as per a report by JM Financial. To put simply, two used-cars will be sold for every new car sold in the country by FY'26.
The market for pre-owned cars was 4.4 million units in the pre-pandemic period of FY'20, the report stated, adding the pandemic-induced demand for personal mobility has contributed to the rise in demand for used-vehicles. Additionally, a rise in prices of new cars after the implementation of BS 6 emission norms has has also contributed to this.
Further, a supply disruption over the past year has prevented auto companies form rolling out enough new models to meet the increased personal mobility demand, thus, this has led to a surge in the demand. Also, with safety and value for money being given importance in the used-car market, purchasing a second-hand car is not socially looked down upon anymore, the report added.
Another factor contributing to a rise in demand for used-cars is the fact that there is an economic uncertainty due to pandemic-induced lockdowns, thus leading to an issue of affordability for first-time buyers or those looking to spend in a tight budget.
As against the forecasted growth of used-car market from around 4 million units to 8.2 million by FY'26, the new car market is forecasted to grow at a slower pace, rising from 2.7 million units in FY'21 to 4.2 million units by FY'26, the report pointed out. It also predicted that the number of private cars in the country is expected to exceed 50 million by FY'26 with annual transactions (new and used) crossing the 12 million-mark.
(with inputs from PTI)