At a time when new car sales are witnessing record decline in India, pre-owned vehicles are likely to witness 10 per cent growth in sales to touch 4.4 million units in 2019 with millennials emerging as major buyers, according to a report by consumer-to-consumer marketplace OLX.
Sales of pre-owned cars in the domestic market stood at 4 million in 2018 and is estimated to be at 4.4 million in 2019, said OLX Auto Note study, a consumer report on the pre-owned car market.
"At 1.4 times the size of the new-car market, pre-owned cars currently comprise a majority of the overall automotive sales in India, and will have touched over 5 million units by 2020 and 6.6 million units by 2023," it said.
In terms of value, the pre-owned car market is currently estimated to be USD 14 billion and is likely to rise to USD 25 billion by 2023, the report added.
At 440 million, millennials comprise over a third of India's population, and nearly half of the total working population. Indian millennials are driving India's consumption story overall, and this trend is also reflected in the pre-owned cars market, OLX said.
"The study on the pre-owned car market shines the light on this group of buyers, who comprise 50 per cent of the current pre-owned car buying demographic," it said, adding for most millennials, a pre-owned car is becoming their entry into the car-owner segment.
Commenting on millennials emerging as a major segment of pre-owned car buyers, OLX India Vice-President (Auto) Sunny Kataria said, "Their attitudes, preferences, and life goals bode well for the continued growth of the pre-owned cars market. They are brand conscious, digitally connected, value maximising and environmentally aware individuals."
He further said, "Over the next three years, millennials will emerge as the largest consumer group in the automobile industry as the pre-owned car industry hits 6.6 million units in market size by 2023."
According to the report, millennials are not only deriving value through buying pre-owned cars online, but also through selling their cars online with 54 per cent affirming that they got a better value for their existing car by selling it on online marketplaces.
The primary motive of 36 per cent of the millennials was to use the proceeds from this sale to upgrade themselves to a new car, while 17 per cent of them upgraded to a pre-owned car with better features, it added.
OLX and OLX CashMyCar had conducted a study with over 1,500 respondents across India who have either sold or purchased a pre-owned car in the last one year.
In contrast to the growth witnessed in pre-owned car sales, new passenger vehicles sales in India witnessed its worst-ever drop in August, slumping by 31.57 per cent to 1,96,524 units from 2,87,198 units in the year-ago period as overall vehicle sales continued to plummet with the sector reeling under an unprecedented downturn.