The used car industry faced significant challenges due to the COVID-19 pandemic and global microchip shortages. However, as the new car sector recovers in Brazil and Mexico, more consumers are trading in their vehicles, resulting in a substantial increase in used car inventory. This surge in supply is expected to drive prices down, leading to an anticipated rise in demand for used cars in the coming years.
Frost & Sullivan’s recent Automotive Aftermarket webinar delved into the realm of Unveiling Megatrends and Opportunities Powering Used Car Segment Growth in Brazil and Mexico. This webinar explored the evolving used car landscape, highlighting key megatrends, growth opportunities, and technological advancements.
Here, the following growth expert evaluated the primary challenges, growth opportunities, and examined the role that various stakeholders will play in shaping the industry’s trajectory: Ingrid Schumann—Growth Expert and Industry Analyst at Frost & Sullivan.
Gain valuable growth perspectives by clicking here to access the recorded session of this think tank.
You can also click here to access our latest analysis revealing lucrative growth opportunities in the global automotive aftermarket space.
Economic Factors Shaping the Used Car Industry: In Mexico, the used car segment is becoming highly competitive due to the recovery of new car production and sales, along with the influx of low-cost Chinese original equipment manufacturers (OEMs). Meanwhile, in Brazil, high car prices are driving consumers toward used cars. What steps can your organization take to stay competitive in Mexico’s used car segment amid the recovery of new car production?
Rise of Digitalization in Car Purchases: The digitalization of the purchase process is transforming the used car space. Consumers typically begin their buying journey online, researching models and prices, which increases the need for dealerships to enhance their online presence and digital services to stay competitive. What innovative business models are your teams implementing to attract and engage online car buyers?
Growth of Certified Pre-Owned Car Programs: In Mexico, the prevalence of fraud in private used car sales is pushing consumers towards certified vehicles. OEMs are responding by launching certified pre-owned programs to guarantee vehicle quality and build trust. Similarly, in Brazil, certified pre-owned car programs are gaining traction as consumers seek secure and reliable purchases, even at higher prices. Is your organization collaborating with OEMs to strengthen its certified pre-owned vehicle offerings?
Impact of Financing and Economic Conditions: Improved financing conditions are playing a crucial role in stimulating the used car domain in both countries. In Mexico, automotive companies have made financing more accessible, while in Brazil, dealerships are offering promotions and better financing terms to attract buyers. What best practices is your organization implementing to align its growth strategies and stay competitive in Mexico and Brazil’s used car market?
Consumer Preferences and Industry Segmentation: In Brazil, majority of used car sales are concentrated among older vehicles, with cars over nine years old comprising almost 59% of sales. Conversely, in Mexico, there is a high degree of industry informality, with most sales occurring between individuals and many transactions not being formally registered. This difference in industry dynamics highlights the unique characteristics and consumer preferences in each country. Are your teams developing partnerships or collaborations to gain better access to the informal used car industry in both the regions?
