Changing Dynamics Boost Growth for the North American Used Car Industry
Lack of new cars for sale and demand for digital and contactless services influence growth strategies
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The COVID-19 pandemic and global shortages of microchips have had a huge negative impact on the North American used car market (the United States and Canada). Factories and dealerships remained closed during lockdowns, which stalled car production and sales. After they reopened, the lack of microchips interrupted car production once more. Although in 2020 approximately 40.7 million used cars were sold (a decrease of 7.4% year over year), this market has experienced high demand as a result of low new car inventories.
The 2 countries analyzed in this report have different sized used car markets. In 2020, almost 93% of total North American used car sales occurred in the United States, and by 2026, this figure will remain practically unchanged. Also, used car prices in the United States have increased much faster than in Canada, which has driven Canadian used car exports to the United States.
In this study, the North American used car value chain is segmented into 3 sales channels: franchised dealerships, independent dealerships, and private (peer-to-peer) sales. Inside independent dealers, online-only players stand out as emerging and disrupting the market.
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