Online Car Buying Market is Estimated to Witness High Growth Owing to Rising Consumer Concerns Regarding Vehicle Purchasing Process
The online car buying market allows customers to browse new and used vehicle inventories, get price quotes, and purchase vehicles entirely through digital platforms. The online car-buying process offers benefits such as eliminating long negotiations, allowing customers to research multiple dealer inventory from the comfort of their home, and providing transparent pricing. The growing consumer preference for transparency and convenience in vehicle purchases is a key factor driving the adoption of online car buying platforms.
Global online car buying market is estimated to be valued at USD 328.90 Bn in 2024 and is expected to reach USD 751.83 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 12.5% from 2024 to 2031.
Key Takeaways
Key players operating in the online car buying market are Carvana, Cars.com, AutoTrader Group, TrueCar, Vroom.
The rising popularity of digital retailing and customers shifting towards online shopping post covid-19 pandemic has opened new opportunities for online car dealers to expand their business. Besides, the increasing investments by key players to bolster their digital presence through upgraded websites and mobile applications are further fueling the market growth.
The Online Car Buying Market Trends is also witnessing rapid global expansion with key players focusing on penetrating untapped markets of Asia Pacific and Latin America through strategic partnerships and acquisitions. The availability of customized online shopping solutions as per regional customer preferences is driving the adoption of online car buying platforms in international markets.
Market drivers
The key driver for the online car buying market is the rising demand for hassle-free car purchasing experience. Online car buying platforms provide a convenient and transparent vehicle buying process to customers without the need for extensive paperwork or lengthy negotiations. This is attracting a large consumer base, especially among millennials and generation Z who prefer online shopping over traditional dealerships. The COVID-19 pandemic has further accelerated digital shifts in automobile retail, benefiting online car dealers.
PEST Analysis
Political: Government regulations related to safety standards for automobiles and their online procurement may impact the market. Higher emission norms may drive demand for electric vehicles.
Economic: Rising disposable incomes and adoption of digital platforms among consumers are driving market growth. Lower interest rates on vehicle loans are encouraging purchases.
Social: Changing customer preference towards contactless purchase experience during the pandemic is benefiting the online channel. Younger demographics are more comfortable with online shopping.
Technological: Advanced digital solutions for virtual test drives, online loan applications, and vehicle customization are enhancing customer engagement. Growth of EV technologies will open new opportunities.
North America has the largest market share in terms of value due to high digital adoption and proliferation of online vehicle retailers in the US and Canada. China is expected to witness the fastest growth on account of rising internet penetration, growing emphasis on new energy vehicles, and supportive government policies promoting online sales.
Europe currently captures a significant portion of the global market value led by countries such as Germany and UK. Large automotive manufacturing base and tech-savvy customer base give the region an edge. However, the Asia Pacific region excluding China is emerging as a lucrative market and will exhibit rapid expansion through government-led initiatives for smart transportation systems and automotive industry development programs.
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