Exclusive: Hatchbacks Lead In Used Car Sales, As Per IBB Report FY2021-22

The fifth edition of the Indian Blue Book (IBB) was recently launched, and it continues to be one of the most accurate and data-driven reports on used car market in India. The 2022 IBB says that a vast majority of first-time used car buyers, that is 59 per cent, prefer purchasing hatchbacks. Used SUVs are becoming more popular as a second vehicle due to their increasing availability as compared to FY2020-2021, garnering a total of 26 per cent of used car sales, while sedans are the least preferred segment, constituting only 15 per cent of total used car sales in India. 

Also Read: Women Constitute Up To 15 Per Cent Of Used Car Buyers In India

In the last financial year, a sharp increase has been observed in shift of buyers moving from mass market to mid-premium cars majorly across Metro cities due to higher purchasing power and greater availability of vehicles across dealerships.  

In FY2021-2022, the Indian used car industry was valued at $23 Billion. It is expected to grow and expand at a CAGR of 19.5 per cent in value and 12.7 per cent in volume by FY2026-2027. The IBB 2022 projects a significant shift in the Indian used car market over the next decade, with buyers evolving and becoming more informed. The used car to new car ratio reached 1.4 in FY2021-2022. While new vehicle supply constraints contributed to this change, it is expected that the used car market would grow to 1.9 times the new car volumes by FY2026-2027. 

This upward trajectory is supported by a 13 per cent CAGR growth in volumes to reach 78million units, of which 8 million used cars are expected to be exchanged in FY2026-2027. However, due to supply and demand constraints, the Indian used to new car ratio remained flat in FY2021-2022 compared to FY2020-2021. Furthermore, buyers were holding on to their old cars due to delays in the procurement of new cars due to chip shortages. This has improved towards the start of FY2022-2023 and used car sales are expected to outweigh new car sales.