The digitalization and pandemic have together transformed the automotive industry, bringing in its wake increased demand for used cars.
With the rise of owning a vehicle, consumers are now ditching brand-new cars for pre-owned ones. As used cars satisfy the social distancing norms and better value for money options.
According to recent reports on the growth analysis of the automotive industry, the pre-owned or used car market has been outpacing the new car market in the past few years. OLX research shows that the pre-owned car industry is expected at a growth rate of 15% in FY22.
Moreover, the next five years look promising with expected growth from 25% in FY21 to 45% by FY25.
To tap this opportunity, automobile industry players are working on new business models including increased digitalization.
Growth analysis of the used car industry
Some of the key players in the pre-owned market in India are OLX, Mahindra First Choice Wheels, Cars24, Maruti True Value, Hyundai H Promise, and Droom, to name a few.
The digitalization of online car market purchases will open the doors for unorganized dealers and potential buyers giving more accessibility, convenience, and transparency.
Joining this race in the automobile industry, companies like Volkswagen have fastened their belts and are working hard to strengthen their pre-owned car network to address the customer and market requirements.
The automobile industry around the globe is on the edge between new and pre-owned car sales, bending more towards the latter. In addition, with the outlook of tremendous used car market growth, here are some of the factors driving this shift.
The value of the new car usually depreciates by around 30% within a year of its purchase. Therefore, this pushes the used car market, where customers can save some money from their pockets and still own a car.
Also, with social distancing and COVID-19 safety norms, buyers are more inclined towards personal mobility. Also, the inclination towards owning a vehicle is satisfied by the used-car market at a price much lesser than a new purchase.
Reduction in ownership period
There’s a parallel between the used-car market growth and vehicle ownership. Earlier, the car owner held the vehicle for 6-7 years before purchasing a new one.
By 2021, the automobile industry saw another change, where the ownership period had reduced to 3.5 years. This implies a new car will be listed in the pre-owned marketplace within 4 years at a much lesser price.
Digitalization has transformed operations in various sectors, including the automobile industry. The change in customer purchase behavior has boosted the online platform for pre-owned cars.
The digital marketplace opens a range of options to the customers, including security, transparency, and convenience. Thus, to sell more, you need an influential digital presence. This is where Spyne helps you by generating studio-setting car images at a much lesser cost and faster speed compared to traditional car photography.
Demand for used luxury cars
A luxury car puts more weight on buyers’ pockets, which ends up being a dream car. The shift towards used-car in the automobile industry has made these cars affordable at sedan prices from a lower segment.
When the industry faced a decline in car ownership, it included selling or exchanging premium or luxury cars.
Also, the market value of these cars depreciates faster than standard cars, thus the chances of finding these cars within 1 – 2 years of their purchase are more.
Car manufacturers are implementing designs with advanced technology making these modern cars more reliable. Unlike previous times when maintaining a car was a hustle, these technology-integrated vehicles are easier and smoother to maintain.
Also, some of the manufacturers promise 7 years extendable warranty, to cover manufacturing-related defects without any extra penny. With reduced ownership time and these promises, second-hand car buyers can experience new-like purchases.
Being future-ready using AI
When the industry buyers are ready, are you? The car dealers need to pace with digitalization, in simpler terms, they should be ready to sell online.
The aspirations of second-hand car buyers will drive the preowned car market to grow in the next few years due to: less cost, more reliability, and saving money on taxes. The automobile industry should buckle up for more used-car sales and online purchases.
Companies like Droom, OLX, OLA, Car24, etc are already leading the market with their online selling marketplace. Most of used car sellers have found a creative way to gain many customers and sell more cars by investing in photography sessions for studio-quality photo shoots.
The studio-like photoshoot for used-car makes them look new and eye-catching, which attracts customers. However, professionals at studios are expensive and it takes time for them to get back to you with the photos.
This is where Spyne AI-based photoshoots create studio-like photos in less than 10 seconds. It doesn’t matter if you have a good camera, AI will automatically create studio-like photos without actually setting up a studio at 1/4th cost and 500x speed.
The high-quality product images will make your listings more attractive and will give you a higher chance of closing deals. It is a quick way to sell your used cars giving you an edge over other dealerships.
Suggested Read:The New Revolution in Car Selling Industry: AI Image Editing