Member Article

Trends and Shapes in the Global Car Resale Markets

Images of new cars and gleaming showrooms come to mind when picturing the global automotive market. A world of major car manufacturers, slick car shows and sophisticated international marketing campaigns.

However, the used car resale market is comparable to the primary vehicle sales sector in terms of size and reach. In fact, in some countries, the car resale market even outstrips new car sales.

For example, in U.K, the value of used car sales in 2014 stood at GBP £45.1 billion. This was 51% of the total value of the U.K. automobile market.

How is the Market Shifting?

Traditionally, the Americas have dominated the car resale market with more than a 50% share of trade. Even in 2016, Americas as a region contributed more than 47% of used cars sales around the world. However, according to Technavio, Asia Pacific is fast emerging as an important used car market. Some experts believe that this region could soon become the top market globally for used cars. Asia Pacific, simply referred to as APAC, includes most of East Asia, South Asia, and Southeast Asia. The third biggest region in terms of used car market share is EMEA: Europe, Middle East, and Africa.

Until relatively recently, much of the global car resale market existed offline with customers going to showrooms to buy used cars. Buyers typically visited several such showrooms and compared prices and features of cars before taking a decision to buy. However, the arrival of high speed internet and mobile apps have now made it possible for customers to do all their research online. This means customers now make buying decisions more quickly when purchasing pre-owned vehicles.

The uncertainties and risks associated with used cars traditionally forced customers to physically examine the car themselves. However, the segment of certified pre-owned cars is increasing at a brisk pace. Private sellers and dealers offer peace of mind to buyers with warranties, service history documents and guarantees.

Buyers often prefer to spend a little more money to buy certified pre-owned vehicles as they know they can buy the car of their choice with confidence. This has fueled a significant growth in online sales of used cars.

The Rise of Used and Online Car Sales

The UK remains one of the biggest markets in the world for used car sales figures with 8,113,020 second hand cars purchased in 2017 according to smmt.co.uk.

Meanwhile there is a notable growth in the online sale and import of classic or exotic cars from foreign countries. This trend is common in countries where cars from Japanese, German and U.S manufacturers have not typically been widely available or where there are no stringent rules against import of used cars from abroad.

In countries such as Germany, Japan and France there is a trend among car owners to go for a new car every four to five years. Therefore, used cars are sold on from these countries at relatively low prices. These cars are often imported by customers in South American, Asian and African countries where there is an allure around imported cars.

In Japan, for example, used cars are sold by owners and dealers at auto auctions. From there, these cars make their way into markets across the globe depending on local demand.

The Last Word

As we can see, the automotive industry is constantly changing, as it yields to specific trends and consumer behaviors. The rising prevalence of used cars and online sales represent relevant cases in point, with new vehicle sales being impacted by the economic impact of Brexit.

Make no mistake; it’s the brands that recognize these trends and adapt their business models accordingly that will thrive in the current market, while also blazing a trail for their competitors to follow.

This was posted in Bdaily's Members' News section by Lewis Humphries .