Singapore Used Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Singapore Used Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Singapore used car market was valued at USD 40.03 billion in 2021 and is expected to reach USD 51.43 billion by 2027 registering a CAGR of above 4% during the forecast period (2022 - 2027).

The COVID-19 pandemic had a mixed impact on the market, during 2020 due to lockdowns and restrictions the demand in the market halted. However, the pandemic influenced consumer behavior positively towards owning a vehicle over public transport indicating an increase in potential customers of the used cars market. By first half of 2021, the demand for used cars started picking up pace as majority of these people who could not afford a new car in the first place, started inclining towards the most optimal solution available, that is, purchasing pre-owned vehicles.

Over the medium term, factors such as increasing purchasing power and easy availability of finance are expected to contribute positively to the market's growth. Further, rising digitalization, internet penetration, and an increase in online players are likely to act as critical factors in boosting used cars sales as they have made the overall process of selling and buying used cars quite convenient and prompt.

However, recent incidences like surge in prices of used cars across the country in wake of rising along certificate of entitlement (COE) premiums and large cars COEs breached the USD 100,000 mark indicate signs of weakening market. Such instances are forcing dealers to uphold prices on cars they had bought when the market price was high, these factors if prolonged estimated to act as potential challenges.

Furthermore, the rise in the value-added service offering and variety of finance providers offering credit for used cars will also contribute to the growth of the used car market in the region. However, the higher interest rates might turn around some potential customers hampering the market’s growth.Another major factor aiding the market growth is emergence of various Non-Banking Finance Companies offering low-interest rate compared to banks and flexible installment options.

Central Singapore followed by North East and North West community development council expected to see positive growth during the forecast period. The demand expected to be driven by high net worth individuals and consumers inclination towards immersive purchase experiences provided by several used car dealers operating across these regions in the country.

Key Market TrendsOrganized Segment Expected to Hold Significant Share in the Market

The market share of the organized segment of Singapore's used car market is expected to increase over time as more brands are planning to enter the OEM pre-owned certified space. The growth of this segment is likely to be further driven by the emergence of online auto-portals and classified platforms such as Carousel and DBS Car Marketplaces which aim at providing increased visibility and credibility to customer-to-customer transactions.

Singapore is one of the emerging markets across the European region where the organized sector is gaining momentum as major OEMs have notable proliferation in the market. Toyota has the highest brand prominence followed by Japanese brands such as Mitsubishi, Hyundai, Nissan, etc., capturing a high proportion of the total market as well. Further, this growth is supported by a proliferated network of multi-brand dealers who offer prominent models like Toyota, Nissan, and others.

The organized segment is likely to accommodate the increased number of dealers spread across the country as more and more organized players are likely to enter the market. For instance,

• In 2021 Borneo Motors has officially announced its pre-owned/used car retail operations for Toyota and Lexus – Toyota Certified Pre-Owned and Lexus Certified Pre-Owned, for each car brand respectively. Inchcape Certified Pre-Owned and Toyota and Lexus Certified Pre-Owned claim to bring brand-name reliability for a better experience to pre-owned car purchases in Singapore.

Moreover, as buying used cars from organized players comes with the added advantage of availing maximum value-added services which are not provided by the unorganized players, the consumers tend to prefer organized dealers over their counterparts in coming years. Such developments indicate a positive outlook for the market during the forecast period.

SUV segment of the Market Likely to Play Key role During Forecast Period

The SUV segment of Singapore's used car market is expected to witness decent growth during the forecast period. SUVs have become increasingly popular among Singapore used car buyers in recent years. Consumers are always interested in looking at the current SUV models on the market, while dealers compete to offer new SUVs for this growing market. The SUV trend in the youth may be the driving force for the SUV segment among domestic buyers.

In this situation, the existence of SUVs with luxurious and sporty looks generally cater to the higher class while yet providing a reasonable level of comfort. SUVs offer greater deals to customers who have these concerns. Even for a low budget, there is a low-cost SUV that nonetheless gives the image of a robust and latest vehicle. This SUV sector is a good value for money in the middle-class economy.

The emergence of the sub-compact SUVs also has offered many possibilities to dealers as these models come with both performance and budget. Some of the top-selling SUV models include Toyota RAV4 Hybrid, MG HS, Skoda Karoq, Toyota Harrier, Honda BR-V, Suzuki SX4 S-Cross, Daihatsu Terios, Toyota Rush, Chevrolet Trax, DFSK Glory 580, and others. The BMW X-series, Audi Q-series, Mercedes G-series, and Volvo XC-series are among the most popular SUVs in the luxury and premium classes, with the BMW X-series, Audi Q-series, Mercedes G-series, and Volvo XC-series among the most popular.

In the forecast period, used car sales are anticipated to shift from a car capable of transporting many passengers, like Multi Purpose Vehicles (MPV), to Sport Utility Vehicles (SUVs). This shift is attributed to improved road infrastructure, which has led to a preference among consumers for SUVs when traveling to different places. such developments in the market projected to poise positive outlook for the market during the forecast period.

Competitive Landscape

The Singapore Used Car Market is moderately fragmented owing to its competitive nature and the presence of a large number of regional and domestic players operating across the country. while some prominent players focused on fleet expansion and collaborations, etc. the new entrants ate focused on widening their customer base by adopting varying strategies. For instance,

• In June 2021, Singapore-based start-up Carro announced that it has raised USD 360 million in a Series C funding round led by Softbank's Vision Fund. The start-up operates an online marketplace where users can buy, sell or lease pre-owned and new cars. It also sells financing options, insurance, and maintenance services for those vehicles.
• In July 2021, Tanglin Cars Pte. Ltd., an authorized reseller of, among others, used BMW and Ford cars in Singapore, sold its 40% shareholding in Performance Premium Selection Ltd (“PPSL”) to Performance Motors Limited (part of the Sime Darby Motors Group). The parties have completed the agreement in November 2021, making Sime Darby Motors the sole owner of PPSL after completion.

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