1. The used car industry in Egypt is expected to grow at a CAGR of 15.3%, with a few players dominating the majority of the market
The market grew at a CAGR of 5.9% between 2016 & 2021 is expected to witness a growth of 15.3% between 2021 & 2026. The major growth drivers are availability of financing options, online presence of new emergent players & increasing smartphone & internet penetration. On the other hand, a few market restraints such as outdated regulations, sheer lack of organized sector & low purchasing power of the millennials might be a hindrance when it comes to the overall growth trajectory of the market. When it comes to the way forward a few steps can be initiated to ensure a positive growth:
- Leveraging technologies such as Artificial Intelligence & Virtual Reality to enhance user browsing experience and car inspection
- Growth of transactional marketplaces offering one-stop solutions to buyers & connecting dealers, financing & insurance companies.
- Dealerships anticipated to increase online presence on online platforms or through own websites & Instagram to boost sales
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- Unorganized sector accounts for a major portion of the pie & has outnumbered the organized sector when it comes to ‘Used Car Market’ in Egypt
Capturing majority of the Used Car Market in Egypt, unorganized sector had the commission margin of 5%-15% operating across Egypt especially rural areas. Moreover, online advertisements have acted like a catalyst when it comes to the sale & purchase of used cars across Egypt. Independent dealers are able to have a major influence across the market by increasing their online presence like listing their inventory on their own website/Facebook account thereby attracting a large number of customers.
- Used car portals in Egypt have evolved over the years from basic classified listings to transactional marketplaces with their main focus on improving industry efficiency.
- C2C: The emergence of used car portals started off with general listing platforms such as Car Semsar which allow sellers to post ads of various products. The potential of used car market led to the entry of dedicated used car platforms. Moreover, the C2C scenario connected buyers & sellers on a mutual platform which enabled efficient processing of the entire deal.
- B2C: B2C basically acted as the evolved version of C2C platforms, providing specialized monthly & annual listing & subscription packages for dealers.
- C2B: C2B enabled sellers to sell used cars directly to online players who in turn sell the inventory to the dealers either by way of bidding or a general sales process while charging a margin of the principal amount.
- B2B: In the recent years, auto portals have started partnering with finance & insurance companies, connecting them to dealers. Moreover, a possibility of auto portals enabling businesses to sell/auction cars on their platform to the dealers can also be perceived.
- Complete transactional marketplace: Transactional marketplaces provide consumers a completely digital experience & enable them to book test drives & buy cars online. Moreover, these platforms also provide ancillary services which includes insurance, warranty, financing options & documentation support.
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