An action-packed industry, the automotive sector is always on the lookout 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, 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 they 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 the ownership cycle also means that the quality 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 in them. 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 and thereby contributed to the overall growth of this market.
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 market for pre-owned cars, the demand is gradually catching up in Europe and APAC regions as well.