South America Used Car Market Outlook, 2029

South America Used Car Market Outlook, 2029

Over the future years, there will likely be major changes to the used car market in Latin America. Future business models and technological advancements are probably going to totally change the way used cars are purchased and sold. Based on variables such the national economy, the unregulated nature of the market, laws governing used automobile sales, consumer protection, and emission requirements. Economic disruptions that impact new car sales, new rules formalizing the used car industry, new channel distribution, and technological advancements are all contributing to the sector's transformation. Due to economic realities, the used automobile market in South America is thriving. Because they can be substantially more expensive, many people cannot afford new cars. Older, less expensive versions are highlighted as a result of this cost aspect. Popular finds include European and Japanese automobiles from the 1990s and early 2000s as well as cars made in Brazil and Argentina. The market is dominated by fuel-efficient hatchbacks and sedans because gasoline prices are frequently high. Along with compact sedans like the Toyota Corolla and Chevrolet Onix, popular options include small hatchbacks like the Toyota Yaris and Volkswagen Gol. South American auto owners frequently depend on a robust do-it-yourself culture for upkeep and repairs. Older and less common models are catered to by a plethora of easily available local spare parts marketplaces. Peer-to-peer used automobile platforms and car inspection services are just two of the innovative solutions that South American tech firms are bringing to the automotive industry. When purchasing old cars, South American consumers are becoming more conscious about environmental effect and fuel efficiency. Electric and hybrid cars are becoming more and more popular, especially in big cities. Due to the fact that nations such as Venezuela are witnessing a deceleration in their economic expansion, which has a significant effect on the expansion of the automotive sector, the South American automotive market is extremely susceptible to the volatility of social and political policies.

According to the research report ""South America Used Car Market Outlook, 2029,"" published by Bonafide Research, the South America Used Car Market is projected to add more than USD 85 Billion from 2024 to 2029. Used cars are more affordable than new ones, which are frequently too costly for many South Americans. The general size and vitality of the market are determined by this affordability aspect. Purchasing a new car can be a dangerous endeavour due to currency fluctuations and economic uncertainties. This encourages buyers to go with the more reliable route of buying a second hand vehicle. Due to rising gasoline prices, fuel economy becomes a major concern. Because of this, fuel-efficient sedans and hatchbacks especially the older models are sought-after options in the second hand automobile market. Many South Americans may find it difficult to obtain financing for new cars because of more stringent credit criteria or lower income levels. This reinforces the dependence on the second hand car industry even more. Two prominent projects in South America, the Renovaveis and Caminhao Verde programs, are essential in encouraging eco-friendly practices in the car industry. The Renovaveis program encourages people to exchange in their older, polluting cars for newer, more fuel-efficient models by offering tax benefits. This helps to mitigate the negative environmental effects of these vehicles. Reducing emissions and encouraging the modernization of the current car fleet are the main goals, which will help the transportation sector become more environmentally friendly and in line with sustainability goals. In the meanwhile, the Caminhao Verde initiative concentrates on the freight transportation industry by providing financial aid for the acquisition of new or used trucks that meet certain emissions regulations. By doing this, the initiative hopes to promote the freight industry's adoption of greener technologies, which will lessen air pollution and promote a more environmentally friendly method of products transportation. Together, these programs show a dedication to environmental responsibility and represent a major step toward the region's transportation networks becoming cleaner and more effective.

Major Drivers

Different E-Commerce Platforms Are Emerging in South American Regions:

To a greater extent than before, e-commerce platforms have completely transformed the car retailing industry. An international online marketplace has been made possible by the internet's growing ubiquity. As a result, customers have a wide range of options, including infinite styles, prices, and model comparison tools on internet sites. The majority of dealerships provide information about new and used cars online so that consumers may get images and details about nearly any vehicle that piques their interest. Additionally, the user can contact any of the numerous dealers listed online or give them a call to obtain the necessary information on the car model in the event that pricing and incentive details are unavailable. Additionally, a number of firms that sell used cars online provide free or heavily discounted after-sales service packages that cover a variety of maintenance expenses related to the vehicle after it is purchased.

Improvements in Information Symmetry and Transparency between Dealers and Customers: Instead of accepting the car that's on the lot as the sole alternative available, consumers want the freedom to customize a vehicle to meet their needs. Therefore, in order to prevent conflicts or disagreements throughout their decision-making process, dealers and customers must have mutual trust. The dealer-customer connection must be built on mutual respect and simplicity of purchase, just like in the case of new car sales. In order to assess a product's quality, an asymmetrical connection of this kind will assume that consumers and sellers have the same knowledge. Furthermore, used car purchasers are increasingly turning to the Internet as their go-to source of information. As a result, consumers today are more informed than ever about automobiles, including their quality, residual value, applied prices, finance costs, availability, and, increasingly, the precise profit margin the dealer receives when completing a transaction. Additionally, dealers are able to obtain inventory in new ways and discharge wholesale units faster thanks to technology. These and other advancements in the used automobile industry are assisting dealers in streamlining their sales process and enhancing inventory flow control.

Major Challenges

Absence of Used Car Post-Sale Services: Undoubtedly, achieving client satisfaction is a crucial goal for any organization, not just to ensure its survival but also to ensure its continued existence. Unfortunately, because of the fierce rivalry and complexity of customers, this is not an easy feat to do in real life. Customer happiness is impossible to get without features that improve quality and are valued by the customers. If consumers express dissatisfaction with the quality of the product during service interactions and after a purchase, the market for used cars would gradually decrease. However, service quality is now a vital component of every service provider's offering in the market, and the auto industry is no exception, with consumers looking for superior after-sales care at a lower cost. Due to the advantages and rewards that after-sales services offer over the short and long terms, it is safe to say that they have grown to be a crucial part of marketing plans for automobile companies.

Uncertainty in Regulation and Unofficial Sales: Certain nations may have confusing or unevenly applied laws pertaining to the certification and sale of second-hand cars. For buyers, this may mean uncertainty and even scams. Even though they may offer lower costs; backyard sales and street markets frequently lack transparency and paperwork, which raises the possibility of purchasing a car with unresolved issues or an ambiguous ownership history.

Based on Vehicle Type market is divided into Conventional, Hybrid, and Electric.

Compared to larger or luxury cars, conventional or smaller cars are frequently more cheap. In light of the economic climate and price sensitivity in several South American locations, affordability becomes a critical consideration for a large number of consumers. Conventional automobiles, which are often smaller and more fuel-efficient, might be a crucial factor to take into account in areas where fuel prices are a major worry. To save money on operating expenses, buyers could give preference to cars with higher fuel efficiency. Smaller and more agile cars may be desired in quickly urbanizing areas where traffic congestion is a prevalent problem. Conventional cars are useful for urban transportation since they are frequently simpler to park and maneuver through congested city streets.

Based on Body Type market is divided into Hatchbacks, Sedan, SUV & MUV, Others.

Hatchbacks are a popular choice for purchasers on a tight budget because they are typically less expensive than larger sedans or SUVs. This is especially true in South America, where decisions to buy cars are frequently heavily influenced by financial considerations. Comparing hatchbacks to larger cars, they are typically lighter and more fuel-efficient. In South America, where fuel prices can be high, this is a significant benefit. For many car owners, the cost of ownership is a critical factor, and fuel efficiency makes this evident. Despite their small size, hatchbacks provide a decent balance of passenger and cargo space. They are therefore perfect for single people, couples, or small families who require a car for regular errands and sporadic road excursions. When necessary, the cargo capacity can be expanded to accommodate larger objects such as bags or groceries.

Based on Fuel Type market is divided into Petrol, Diesel, Others

In many regions of South America, there is usually a well-established infrastructure for gas stations. Owning and operating a gasoline automobile is convenient because to a wide network of gas stations, which adds to the popularity of gasoline cars. Particularly in the second hand automobile market, gasoline-powered cars may be less expensive than hybrid or electric cars or cars using alternative fuels. For many buyers, affordability is a key consideration, and gasoline-powered vehicles may be a more affordable choice. Petrol engines are common in many different kinds and models of vehicles. The availability of a wide range of options, such as petrol-powered sedans, hatchbacks, SUVs, and compact automobiles, gives customers a selection to fit their needs and tastes.

Based on Size market is divided into Mid-Size, Compact, SUVs.

Traffic congestion has increased in many South American cities as a result of rapid urbanization. Compact automobiles are popular options for customers navigating congested city streets since they are frequently more maneuverable and simpler to park in urban settings. In general, smaller cars use less fuel than larger ones. Customers might favour tiny automobiles due to their superior fuel efficiency, especially in light of the current economic climate and concerns regarding fuel prices in some parts of South America. Smaller automobiles are ideal for places with few parking spots and narrower roadways. Because compact automobiles are more practical for parking and navigation, buyers may choose them if the local infrastructure supports smaller vehicles.

Based on Vendor Type market is divided into Organized, Unorganized.

Compared to established dealerships, unorganized vendors, such tiny independent dealers and private proprietors, frequently have cheaper overhead costs. This means that purchasers may be able to negotiate lower asking prices, which may appeal especially to consumers on a tight budget. Unorganized vendors can now reach a far wider audience thanks to online marketplaces and classifieds websites, which provide buyers with access to a huge inventory of used automobiles to peruse and contrast. More options and easier access may result in more affordable prices and a more pleasant car-buying experience. Larger dealerships may not give priority to certain niche markets or specific automotive tastes, but the disorganized segment can frequently better serve them. For purchasers looking for older models, historic cars, or autos with specific modifications, this can be useful.

Based on By Distribution Channel market is divided into Offline, Online.

Salespeople with training are frequently available in offline dealerships to handle concerns, answer inquiries, and possibly even negotiate better prices. For certain purchasers, especially those who are not familiar with the intricacies of car purchasing, this individualized service can be comforting and helpful. Online marketplaces may have a large inventory, but their listings might not always be precise or current. Physical automobiles are displayed on the lots of offline dealerships, enabling customers to view them up close and choose other easily accessible possibilities. Offline dealerships frequently provide maintenance and repair services in an effort to foster a lasting relationship with the customer and provide a convenient answer for any post-purchase need. For certain automobile owners, this may be useful.

Based on country report is majorly divided into three major countries, Brazil, Argentina, Colombia.

Brazil's used car market is poised to enter a new phase as the country's ratio of new to used cars is about to go from a baby to a growing stage. However, the difference between Brazil's new and used car markets and certain industrialized and developing nations implies that both have a lot of space to grow. In addition, Brazil's growing middle class and youthful population are to blame for the country's anticipated large growth over the next five years. Additionally driving this increase is the country's continually rising disposable income. The projected rise is also propelled by variables like seamless technological integration, enhanced convenience, accelerated transactions, and other pertinent aspects. Due to advancements in technology, the Argentine used automobile industry is seeing a dynamic shift, much like many other used car markets across the world. Because they allow for direct communication between buyers and sellers, provide a wider selection, and occasionally even lower prices than traditional dealerships, online marketplaces such as Mercado Libre and OLX are industry leaders. 3D tours and augmented reality are being used to create immersive online automobile experiences, which aim to close the gap between in-person interaction and online convenience. Keeping secure records of a car's ownership and maintenance history can promote transparency and increase trust in the used car market. People in Colombia, a country in South America, usually favor used cars built in the United States. In Colombia, a lot of cars are well-known for their great performance, spacious interiors, big trunks, and low fuel consumption. There are several cities in Colombia that are very popular for used Japanese car sales. Among these places is Bogotá, the vibrant capital of the country, which is well-known for its congested streets and diverse automotive preferences. Santiago de Cali is a significant city that strengthens the allure of used Japanese cars and contributes to the national trend. Not to be outdone, these vehicles have also gained some popularity in Medellín, another Colombian city noted for its artistic flare. For a diverse group of individuals, the vibrant culture of the quaint seaside city of Barranquilla adds to the attraction of used Japanese cars.

Key players in the market are focusing on strengthening their online presence by engaging in partnerships with online marketplaces or developing their own e-commerce platforms. This allows them to reach a broader consumer base and offer more transparent and convenient buying experiences. In line with this, manufacturers are organizing certified pre-owned (CPO) programs, which involve inspecting, refurbishing, and certifying used cars to meet specific quality standards. Moreover, these programs enhance trust among buyers in used cars. Apart from this, companies are incorporating advanced technologies, such as artificial intelligence (AI) and data analytics to improve inventory management, pricing strategies, and engagement of individuals.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Used Car market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Vehicle Type
• Conventional
• Hybrid
• Electric

By Body type
• Hatchbacks
• Sedan
• SUV & MUV
• Others

By Fuel Type
• Petrol
• Diesel
• Others



By Size
• Mid-Size
• Compact
• SUVs

By Vendor Type
• Organized
• Unorganized

By Distribution Channel
• Offline
• Online

By Offline Distribution Channel
• Independent Dealer
• Franchise Dealer
• Private Sellers
• Others (Used Car Auctions, Certified Pre-Owned (CPO) Programs, Consignment Dealerships, etc)

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Used Car industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.

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