Used Car Market Size, Share & Analysis Report, by Type (Organized, Unorganized), Fuel Type (Petrol, CNG, Electric, Diesel), Body Type (Hatchback, Sedan, and Sports Utility Vehicles and Multi-Purpose Vehicles), Channel (Online and Offline), Industry Forecasts, 2023 to 2030.

 Pulichser: Innovation Market Research

November 2023

 Pages: 111

 IMR 5811

The Used Car market is dichotomized into two principal segments, namely Organized and Unorganized vendors. Organized vendors typically include established dealerships and certified pre-owned vehicle retailers, while Unorganized vendors encompass private sellers and less formalized resale avenues. The Used Car Market exhibits diversity in terms of the fuel types prevalent in the offerings. Segmentation by fuel type encompasses Petrol, Diesel, Electric, and Other fuel sources, reflecting the evolving landscape of automotive technology and consumer preferences.

The choice of vehicle configuration is a pivotal factor for used car consumers. This segment is categorized into Hatchback, Sedan, and Sports Utility Vehicles (SUVs) and Multi-Purpose Vehicles (MPVs), each catering to distinct market segments, with unique attributes and appeal. The manner in which used cars are transacted represents another facet of segmentation. The market can be divided into Online and Offline sales channels. Online sales encompass e-commerce platforms, dedicated websites, and digital marketplaces, while Offline sales comprise traditional brick-and-mortar dealerships and direct private sales.

The advent of the COVID-19 pandemic has wrought substantial disruption upon the automotive industry. In response to this transformative event, consumers have evinced a proclivity towards private modes of transportation, a behavioral shift catalyzed by concerns over public health. However, the concomitant financial disparities have emerged as a formidable impediment to the acquisition of new vehicles, thus propelling a noticeable trend towards the acquisition of pre-owned automobiles, a decision primarily influenced by economic apprehensions. This paradigm shift has been further accentuated by the ongoing pandemic, which has spurred a surge in the utilization of virtual reality, online platforms, and digitally-generated sales leads for the procurement of new automobiles.

The competitive landscape in the new car segment has intensified significantly, concurrently with the paucity of a substantial customer base inclined towards new car purchases. Consequently, the market for pre-owned vehicles has experienced substantial expansion in recent years. In tandem, market participants within the pre-owned vehicle sector have embarked on a strategic campaign to fortify their dealership networks, strategically investing in multiple states to capture a sizable portion of the domestic consumer base and establish a firm foothold in the market. These burgeoning dealership networks play a pivotal role in enhancing brand recognition and rendering pre-owned vehicles a more accessible and viable option, particularly for the middle-class demographic.

The pre-owned car dealer's operational efficacy is intrinsically tethered to the actions of the seller, as the dealer's ability to cater to their consumer base is contingent upon the availability of vehicles within the market. Any significant contraction in new car sales can lead to an eventual depletion of market supply, thereby posing a potential impediment to market growth during the forecast period.

Furthermore, as pre-owned car enterprises grapple with the multifaceted repercussions of the pandemic-induced market dynamics, they find themselves ensnared within a novel and intricate landscape, characterized by ever-evolving consumer preferences, mutable supply-demand dynamics, and economic exigencies. These variables will undoubtedly exacerbate the challenges faced by all stakeholders within the pre-owned car ecosystem, increasing the pressure to sustain elevated profit margins realized during the pandemic era.

To effectively harness consumer demand, safeguard profit margins, and enhance operational performance, entities spanning the pre-owned car value chain, including B2B and B2C dealers, original equipment manufacturers (OEMs), and financing and leasing organizations, must undertake a substantial overhaul of their business strategies, aligning themselves with a more analytically-oriented approach to maintain a competitive edge.

Beyond the confines of market dynamics, a broader set of challenges has emerged in the form of geopolitical intricacies and supply chain disruptions, notably exemplified by the scarcity of semiconductors and electronic components. These factors have wrought havoc upon both new and pre-owned vehicle supplies over the preceding years. The resultant state of strained supply coupled with elevated demand has culminated in inflated pricing for new and pre-owned automobiles, thereby bolstering profit margins. Nevertheless, with the resurgence of supply for select models, demand is now encountering considerable resistance, as inflationary tendencies in various regions exert pressure upon consumer purchasing power. Consequently, dealers are witnessing an erosion of their pricing authority, with the average price of pre-owned cars in the United States surging by 25 percent between 2020 and its zenith in 2022, only to recede in subsequent periods.

The pricing dynamics within the used vehicle market have experienced a notable escalation in the wake of the onset of the Covid-19 pandemic. This marked increase can be attributed to the convergence of two significant factors: the global health crisis and concomitant supply chain disruptions, which intermittently hampered the production of new vehicles. The resultant outcome has been a reduction in the supply of new vehicles, coupled with a concurrent surge in demand, thereby culminating in unprecedented price levels.

As the cost of new vehicles soared and their availability dwindled, consumers have increasingly turned to the secondary market for automobiles. This shift in consumer behavior has catalyzed a substantial upswing in prices within the used vehicle market, driven by a confluence of heightened demand and a dearth of available inventory. Consequently, the interplay of these multifaceted elements has significantly elevated the pricing landscape in the realm of pre-owned vehicles.

Latest Announcement:

October 24, 2023, Asbury Automotive Group, Inc. (NYSE: ABG), a prominent automotive retail and service company in the United States, released its financial results for the third quarter of 2023. The company reported a net income of $169 million, equivalent to $8.19 per diluted share. This figure marked a 17% decrease from the third quarter of 2022 when the net income was $205 million ($9.23 per diluted share).

In addition to the GAAP net income figures, the company also disclosed its third quarter 2023 adjusted net income, which is a non-GAAP measure used to provide a clearer financial picture. The adjusted net income for the third quarter of 2023 was $168 million, corresponding to $8.12 per diluted share. This figure represented an 18% decrease from the adjusted net income of $205 million ($9.23 per diluted share) that the company achieved in the third quarter of 2022.

It's worth noting that during the year 2022, Asbury Automotive Group executed a series of strategic divestitures. In total, the company completed sixteen divestitures, which collectively contributed $683 million in revenue for the year. These divestitures were dispersed throughout the year, with four closing in the first quarter, three in the second quarter, and nine in the fourth quarter of 2022. These strategic actions significantly impacted the company's financial performance and revenue during that period.

October 26, 2023, TrueCar, Inc. (NASDAQ: TRUE) revealed a significant development in its ongoing efforts to provide consumers with the simplest, most efficient, and transparent online platform for the purchase and sale of both new and used vehicles. The company officially announced a new and strategic partnership with Car and Driver, the globally recognized leader in the automotive media sector and a trusted source of information for vehicle shoppers actively exploring the market.

The collaboration between TrueCar and Car and Driver was initiated in August 2023. As part of this partnership, TrueCar has taken on the responsibility of powering the new and used car shopping experiences available to Car and Driver's extensive user base, which comprises a remarkable 15 million individuals. This collaboration leverages the strengths of both companies, combining TrueCar's expertise in online vehicle transactions with Car and Driver's unrivaled position as a prominent automotive media brand.

By integrating TrueCar's technology and services into, the partnership aims to enhance the overall car-buying and car-selling experience for Car and Driver's users. TrueCar's commitment to simplicity, efficiency, and transparency in the automotive marketplace aligns seamlessly with Car and Driver's mission to offer accurate and comprehensive guidance to consumers actively in the market for a vehicle.

Through this collaboration, TrueCar and Car and Driver aspire to provide consumers with an enhanced and user-friendly platform that simplifies the process of researching, comparing, and ultimately purchasing both new and used vehicles. This union of two industry leaders signifies a significant step forward in the world of online automotive marketplaces and aims to empower consumers with the information and tools they need to make well-informed decisions.

This partnership underscores TrueCar's ongoing dedication to revolutionizing the vehicle purchasing and selling process, making it more accessible and transparent for consumers. As TrueCar and Car and Driver work hand in hand to enrich the car shopping journey for millions of users, it is evident that this collaboration will shape the future of online automotive commerce, further solidifying their positions as leaders in the industry.

Used Car Market Key Companies:
Sonic Automotive
CarMax Enterprise Services, LLC
Asbury Automotive Group
TrueCar, Inc.
Scout24 SE
Lithia Motor Inc.
Hendrick Automotive Group

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