Month on month the Indian auto sector is reporting declining sales. However, the picture looks more promising in the used car market. Value conscious buyers are hunting for bargains in the pre-owned segment and driving away with great deals.
According to online classifieds platform OLX, millennials are the driving force behind the growing pre-owned car market. The size of the pre-owned automobile industry is 1.3 times the size of the new car market, and is expected to touch $25 billion by 2023, said a release. The pre-owned car market is at present about $14 billion.
This growth is spurred by millennials, who are digitally savvy, seek choices, maximize value and are conscious of their impact on the environment. Millennials – those between 22 and 37 years of age today – place emphasis on the resale value alongside the technology and safety features in the car, over other considerations like size and brand, the release added.
OLX and OLX CashMyCar conducted a study with over 1,500 respondents across India who have either sold or purchased a pre-owned car in the last 12 months.
The study revealed that value-seeking millennials are turning to pre-owned cars, influenced by their friends and families. "Millennials are drawn by the availability of a variety of cars online – around one-fourth of the respondents said availability of choices among brands is important to them, compared to only 15% of non-millennial buyers. They are willing to sacrifice affordability for choice – 38% of millennials compared to 51% of non-millennials cited this as their primary reason buying pre-owned cars online. 64% of the millennials are influenced by their family & friends when it comes to purchasing a pre-owned car," claimed the study.
Resale value, technology and safety are top three considerations that influence the purchase of a pre-owned cars.
The study further found that almost half of the millennials who purchased a pre-owned car during the last one year were first time car owners. The other half already had an existing car.
Commenting on the insights, Sunny Kataria, VP Auto, OLX India said, “At 440 million, millennials comprise over a third of India’s population, and nearly half of the total working population. They are brand conscious, digitally connected, value maximizing and environmentally aware individuals. The millennials’ decisions on buying cars are relatively more rooted in pragmatism and aspiration, thereby fueling the pre-owned cars business.” He further added, “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.”
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