Study finds Millennials boost sales of used cars
CHENNAI Millennials between 20 and 30 years old, who buy a car for the first time, are driving the boom in Used car market says one last study by Used car platform OLX .
The Used car market, currently at 4.4 million units, will hit 6.6 million units by 2023 and nearly half of millennial Used car buyers are first time car customers, says the report.
This is the segment that was earlier catered to by new entry-level small car models - a market that is currently facing sharp volume downturn, says Sunny Kataria, VP-auto, OLX.
With 440 million, millennials comprise more than one third of India's population and almost half of the total active population and are responsible for driving the history of consumption that is reflected in the used car market, says Kataria.
The study shows that pre-owned cars are the leading choice for first and second time car owners and 49% of millennials who purchased a pre-owned car during the last one year were first time car owners.
The important thing for this segment is the variety that is offered for the price they are willing to pay. A good 27% say that the availability of options between brands is important to them, compared to only 15% of non-millenary buyers, says Kataria.
In addition, this segment is willing to sacrifice affordability to choose from: 38% of millennials compared to 51% of non-millennials cited this as their main reason for buying used cars online, he says.
The study has found that millennials preferred to buy used sedans and hatchbacks rather than buy new entry level small cars. As many as 74% of all pre-owned cars bought online by millennials are sedans and hatchbacks, compared to two-thirds (66%) for non-millennials.
“Millennials also sell a larger variety of cars compared to non-millennials, who are partial to hatchbacks and sedans (two-thirds of all pre-owned cars sold by non-millennials),” says Kataria.
In the first two quarters of 2019, demand for second-hand sedans grew by 72%, hatchbacks by 75% and SUVs by 77% respectively.
According to the report, 64% of millennials are influenced by family and friends when it comes to buying a used car. In addition, millennials are twice as likely to give in to the influence/pressure of friends and colleagues (16%), compared to non-millennials (7%).
When they sell their car, it is mainly about upgrading to a larger model. The main reason for 36% of millennials was to use the proceeds from this sale to upgrade to a new car, while 17% of them were upgraded to a used car with better features.