India's used car market size to touch USD 100 billion-mark by 2034: CARS24 CEO

New Delhi: Indian used car market is expected to touch the USD 100 billion-mark in the next ten years on the back of rising disposable incomes and a growing middle class, according to CARS24 Co-Founder and CEO Vikram Chopra.

As per the findings of the Gurugram-based online used car marketplace, there are changes in market dynamics with customers opting for frequent upgrades when it comes to cars.

"According to our internal study, the anticipated growth of the Indian used car market is set to occur at a 15 per cent CAGR, increasing from USD 25 billion in 2023 to USD 100 billion by 2034," Chopra told PTI in an interaction.

The growth trajectory is propelled by various factors unique to the Indian market, including urbanisation and a growing middle class, which is changing consumer preferences and boosting the demand for affordable mobility solutions, he added.

Chopra noted that when CARS24 began its journey eight years ago, the used car market size stood at around USD 10-15 billion.

"I think, in the last 3-4 years, with different kinds of cars coming up, the market has truly accelerated," he stated.

The car ownership in the country remains low as compared to various developed geographies, Chopra said.

In the US and China or in Europe, 80-90 per cent of the population has a car while in India only around 8 per cent of the population owns a four-wheeler, he added.

"So we still have a long way to go from here," Chopra said.

Another prominent indicator of the adoption of the used cars trend is the shortened ownership cycle, as the younger generation is opting to sell their cars within 5-6 years of purchase, in stark contrast to the patterns observed two decades ago when vehicles were typically held for 10-12 years, he noted.

"As millennials increasingly opt for more frequent car upgrades, the market is witnessing a consistent inflow of high-quality, aspirational cars," Chopra said.

Further, he noted that the demand for feature-packed SUVs has also surged in the last four years, experiencing significant growth from 30 per cent in FY19 to 59 per cent in the first half of FY24.

The SUV-centric trend has extended beyond new car acquisitions and is making its presence felt in the used car market with a 4-6 per cent growth since FY21, Chopra said.

"Our internal analysis indicates a 14 per cent surge in the sales of cars valued above Rs 8 lakh between 2018 and 2023. This shift is intricately tied to increasing income levels and the expanding middle class, influencing the changing landscape of the market," he stated.

Besides, while metropolitan cities accounted for 65 per cent of pre-owned cars supply in FY22, there is a strong inclination towards used cars in non-metro cities, and the demand is expected to swell at a rate of 30 per cent Compound Annual Growth Rate (CAGR) by FY27, he added.

Chopra noted that CARS24 also expects used electric vehicles to become available in the market within the next five years to meet the growing demand.