Mexico’s Second-Hand Vehicle Market Grew in 2021By Antonio Gozain | Fri, 12/24/2021 - 12:52
The unending challenges hounding the automotive industry opened the door for the Mexican second-hand vehicle market. Online transactional company OLX Autos saw a 19-percent growth in sales during 2021 and is preparing to consolidate in 2022.
“Beyond representing an attractive offer in terms of price, online car buying and selling platforms have become a convenient option for buyers and sellers thanks to their inventory and catalog of cars that are not available in dealerships, in addition to shorter delivery times than the waiting lists in the new car dealerships that spanned up to 10 months from the date of purchase," said to El Economista Roberto Villalobos, CEO, OLX Autos.
While new vehicle sales increased by 8.6 percent during November 2021, sales only grew in comparison to 2020, a remarkably poor year for dealerships. The second-hand vehicle market grew in Mexico during 2021 and competition in the online transactional segment has grown, with unicorn Kavak still leading the market.
In November, Mexican startup Odetta began operations in Mexico City. The main challenge for these companies is clients’ preference to sell and buy cars informally, despite the high levels of risk in doing so, reported MBN. “People decide to stay in the informal market because they can receive a higher price when reselling their vehicle. What the seller wants is to receive the highest possible price for the car and the buyer looks for a good car but at the lowest price possible,” said Daniel Esponda, Co-founder, Odetta.
Online transactional companies are increasing their participation in the market, not only because they acted rapidly and were ready to offer safer solutions to clients during the pandemic, but also because they solve two of the main challenges that hinder used-car transactions. In such a market, there is a great deal of uncertainty about the actual state of the vehicle (including not only the physical and mechanical conditions, but also its criminal history, if any) and also many concerns about the security conditions of the deal, wrote in MBN Lorena Isla, Director, Mobility, Frost & Sullivan.
These companies’ business models consider the current situation of the Mexican economy, said Villalobos. He explained that OLX Autos launched its own financial company, with attractive alternatives for clients.
“During 2021, OLX Autos bet in Mexico and throughout the months the company invested in opening points of sale in Guadalajara and in strategic areas of Mexico City, such as Santa Fe, to provide its users a physical space where they can verify that their vehicles are in good hands,” said Villalobos.