An action-packed industry, the automotive sector is always on a look out for ways in which it can innovate and reach out to its customers. And the market for used cars is perhaps one of its most sought-after segments. Even though there are several challenges in the used cars market, a thorough understanding of the industry will go a long way in better procurement processes.
Useful details on used car market
Contrary to popular belief, the demand for used cars is rather huge. The reason for such a growing demand is rather simple. Cars are no longer seen just as a means of transport; rather they are now a status symbol. This explains how frequently the cars are being brought and sold. Five years back, the ownership cycle of a car was around 7 years. Today the ownership cycle has come down to 4 years, and market analysts believe that by 2021 the period might come down to 3 years. Decreasing ownership cycle also means that quality of used cars is rather good, and buying it is a total value for money.
The overall quality of the cars which are being produced, has also improved drastically. Customers find the used cars to be far more reliable, making it easier for them to invest on it. The third and perhaps the most vital factor behind the growing market for used cars is the emergence of an organized group of players who see a lot of potential in this area of the automotive industry. Major names like eBay Motors, TrueCar, and Alibaba Group have made it easier for customers to buy used cars and thereby contributed to the overall growth of this market.
Lastly, today, there is a growing acceptance for used cars that is driving this industry.
Important place for used cars in the automotive industry
Despite being dominated by small dealers, the used cars vertical has emerged as a very strong segment in the global automotive industry. Though the United States is the leading the market of pre-owned cars, the demand for used cars is gradually catching up in Europe and APAC regions as well.