India’s pre-owned car market poised to reach ₹5 lakh crore by FY28: OLX report

India’s pre-owned car market is estimated to expand from ₹2.1 lakh crore in FY23 to ₹5 lakh crore by FY28, with a volume increase from 46 lakh units in FY23 to 85 lakh units over the next five years, according to the OLX Mobility Report (previously called the Autonote). 

Despite challenges in FY22, the pre-owned car industry exhibited robustness, experiencing a notable 14–16 per cent growth in FY23 attributed to market reopening, increased preference for personal mobility, and rising disposable incomes. Anticipating a 15 per cent growth rate in FY24, the industry is outpacing the new car market, with volume and value growing at a CAGR of 13 per cent and 18 per cent, respectively.

Further, the segment is experiencing a shift towards premiumization, with UVs and feature-laden vehicles gaining popularity, and the electrification trend is on the rise. The increasing sales of new electric vehicles reached 59K units in FY23 and 42K in the first half of FY24, with Mahindra, MG, and Tata Motors being the front runners. This signals a shift in both new and pre-owned markets towards sustainable mobility options

In contrast, the new car market, despite achieving a historic 27 per cent growth in FY23 with 3.9 million units sold, foresees a moderated growth pace of 6–8 per cent in FY24, projecting a healthy 5-7 per cent CAGR over the long term.

Siddharth Agrawal, Country Head, Marketing, OLX India, emphasizes the significance of the OLX Crisil Mobility Report, considering it an invaluable resource offering deep insights into market trends and consumer behaviors. The comprehensive analysis aids in understanding the evolving dynamics of both new and pre-owned car markets, guiding strategic decisions and fostering growth in this rapidly changing sector.

Emerging Trends in Two-Wheeler Segment

The Indian pre-owned two-wheeler market, estimated at 27–29 million units in FY23, is expected to grow at a CAGR of 5-7 per cent, reaching 33–38 million by FY28. Motorcycles dominate this market, holding about 72 per cent of the market, while scooters, with a 25 per cent share, are gaining ground.

Despite its growth potential, the market faces challenges like a lack of organized players, quality assurance issues, limited financing options, regulatory complexities, and lesser digital penetration. These hurdles notwithstanding, factors like low market penetration, continuous interest in new models, a shift towards premium two-wheelers, and shorter replacement cycles are likely to drive its growth.  

Hemal N. Thakkar, Senior Practice Leader and Director at Market Intelligence and Analytics , added, “The strong growth in both the new and pre-owned car markets signifies a return to normalcy in India’s automotive sector post-Covid. Our annual study with OLX captures these dynamic shifts and the move towards digital and organized players, which are accelerating the growth of the pre-owned car market.”  

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