Spain Used Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)
Spain Used Car Market was valued at USD 37.06 billion in 2021 and is expected to reach USD 58.74 billion by 2027 registering a CAGR of 7% during the forecast period (2022 - 2027).
The COVID-19 pandemic had mixed impact on the market i.e, while lockdowns and travel restrictions resulted in slowdown in demand during 2020 however on the other hand with ease of restrictions and growing consumer inclination towards used cars inwake of pandemic the demand for used cars in spain started restoring back to pre-pandemic levels.
Over the medium term, factors such as increasing car ownership, mounting penetration of the internet and high depreciation rate of new cars expected to drive the demand in the market. However, the market growth would be challenged by fluctuating prices of used cars, high maintenance and servicing costs and lack of standardization and unorganized regulations for used cars in the country.
Besides these, rising demand for affordable used cars, rising shift towards online buying, technological advancements and reduced rates for car insurance premium for used cars in the country expected to offer lucrative opportunities for players operating in the market. In addition, over last few years used electric vehicle prices continue to remain viable for consumers, and this plays a significant driving factor for electric vehicle sales. According to the last few years price analysis, used electric vehicles prices have been lower than the used hybrid vehicles, such trends to poise optimistic growth of market.
Madrid, Barcelona, Valencia, and others are some of the notable cities in Spain which expected to see optimistic trends of used cars in the country over forecast period. These countries support majority of the population and accommodate notable players operating in it offering attractive incentives. Such developments are expected to ease growth of market during the forecast period.
Key Market TrendsRising Demand for Used Cars Over New Cars to Enhance Growth of MarketOver recent years, the demand for used cars is rising significantly and is expected to have decent proliferation over coming years in wake of changing perspectives of consumers as no longer secondhand cars are stereotyped with downsized social status. Also, entry-level used cars are perceived to be safer than two-wheelers as they are less prone to accidents. Hence there is a shift towards used car buying resulting in greater customer pull. Besides these, preference for personal mobility in the post-COVID period has also been a positive factor supporting this trend.
In addition, the incentives offered by the government to replace older IC engine vehicles with newer ones prompted to encourage used car dealers to adopt latest electric cars into their fleet, and such instances are expected to help dealers to expand their fleet with latest models. For instance,
With the rise in repalcement of older IC engine vehicles with new electric vehicles by fleet operators is anticipated to drive the influx of used cars in the market, which is likely to reduce the overall cost of used vehicles. Further, with the shoratge of new vehicles in the market, the demand for used cars is anticipated to witness steady growth during the foreacst period.
Online Booking Segment Likely to Play Key Role in the MarketThe online booking segment of the market is expected to occupy a predominant position in the market during the forecast period. Consumers are moving away from traditional techniques and increasingly using internet platforms to acquire and sell used cars. Many European start-ups and auto portals are increasing their presence in Spain through mergers and acquisitions, collaborations, and various other growth strategies recognizing the industry's potential.
In addition, growing internet and smartphone penetration is encouraging the majority number of consumers to opt to buy and sell cars through online auto classifieds and social media. For instance, There were 42.54 million internet users in Spain in January 2021, and the number of internet users in Spain increased by 144 thousand (+0.3%) between 2020 and 2021. The development of online tools for sellers and buyers has made the market more competitive. In addition, the online availability of information including prices, reviews, and specifications leads to significant growth by dealers.
With the usage of technically advanced tools integrating the latest technologies like artificial intelligence and machine learning, dealers are booming their network and customer base. AI applications can evaluate the data stored in the dealer management system and aid in refining the marketing and sales strategies by modifying the car buying experience. For instance, the use of online sales channels such as CarMax, impel, seez, and others are playing vital role in country-specific growth in the market by targeting the domestic customer base. Various online channels modify their platforms to offer seamless car selling and buying experiences.
Competitive LandscapeSpain used car market is moderately fragmented as it accommodates several regional and domestic players. Several players especially the online used car platform dealers and new entrants along with established players in the market are focusing on various growth strategies such as expansion, collaborative agreements, mergers, acquisitions, etc. to expand their customer base. For instance,
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