MUMBAI: India’s used-car market is projected to grow to $70 billion by FY31 from $35 billion in FY26, driven by rising affordability, faster replacement cycles and increasing formalisation, according to Redseer Strategy Consultants.
Annual retail sales are expected to reach 9–10 million units by FY31, with average selling prices rising to Rs 6.5–6.9 lakh. India is currently the fifth-largest used-car market globally and is expected to become the third-largest by the end of the decade, after the US and China.
The report said India remains the fastest-growing among major used-car markets, supported by rising incomes, premiumisation and an expanding vehicle base expected to exceed 50 million by FY31.
The replacement cycle is expected to shrink from 7–8 years in FY21 to 4–5 years by FY31, with metros and Tier 1 cities leading the shift.
“Shorter replacement cycles, rising incomes, and improved access to financing are collectively expanding both supply and demand in a sustained manner. Used cars are no longer being chosen merely as an economical alternative born out of compulsion, but are increasingly being preferred for value optimisation, assured quality, and the convenience offered by organised platforms,” said Kushal Bhatnagar, associate partner of Redseer Strategy Consultants.
“As these organised models, led by full-stack players, continue to scale and gradually eliminate the longstanding trust deficit, the used-car market is well positioned to establish itself as a central pillar of India’s personal mobility landscape,” he added.
Full-stack players are projected to reach a 5–6 per cent market share and $4 billion GMV by FY31, with about 15 per cent share in metros.
