When it comes to vehicles, most developing regions are ''technology-takers'', i.e., they import rather than manufacture. It has been observed that used vehicles, comprising passenger cars and commercial vehicles such as light and medium-duty, heavy-duty, and off-road trucks account for a large percentage of imports. Trucks that cross a life span of approximately 8–10 years are labeled as used trucks; these trucks offer several benefits over newly purchased trucks, such as low cost and the availability of numerous options.
As with any used vehicle, used trucks are priced lower than new trucks of the same brand. It is observed that used trucks have higher chances of being sold at half the price as they have not reached their total mileage because of depreciation. Trucks tend to depreciate quicker than other vehicle types because of their prominent use in industrial sectors and in most cases, they come with their insurance, which is relatively cheaper than buying a new one because its value decreases as the truck gets older. Additionally, truck owners in developed regions such as Europe and the U.S. are observed to be purchasing new trucks on account of mainstream truck brands introducing new models annually, which further accelerates the depreciation of older models.
Many truck manufacturers such as Daimler and Volvo now offer certified used truck programs that allow buyers to purchase nearly new and reconditioned trucks at the price of used trucks. One of the primary benefits of such a used truck program is that the vehicle comes with a manufacturer's warranty, along with certain perks only available to new buyers. For instance, Volvo, one of the key players in the automotive industry, has a used truck warranty named "Remaining Warranty", which offers used truck buyers a full manufacturer’s, warranty that the truck originally had when it was new. This warranty, together with a comprehensive inspection and pre-delivery preparation, ensures that the vehicle is in its peak condition when taking ownership thus, offers a safer purchase option for used-truck buyers.
The truck segment in the automotive sector has been open to several upgrades. For instance, from being fully automated to now being electric. As the time frame for a new truck to be considered as a used truck is approx. 8–10 years, used-truck buyers have several options to choose from. Used-truck buyers have the advantage of opting for a particular model or wheel design that is no longer manufactured, which is a key driver for the used truck market.
Several countries worldwide have banned the import of used vehicles due to the risk associated with their performance and maintain control over emission levels. According to the United Nations Economic Commission for Europe (UNECE), Egypt, Sudan, and Morocco are among the key countries banning the import of used trucks. Gambia, Ghana, Mali, Cape Verde, and Côte d'Ivoire have implemented punitive penalties and taxations in the import of used vehicles beyond a particular age and the level of CO2 emissions. For instance, Mauritius does not support the import of used vehicles older than three years and has a taxation regime that supports the import of more energy-efficient vehicles.
Developed regions such as the U.S., Japan, and Europe are pegged to be large exporters of used vehicles, whereas, regions such as Africa are tipped to be large importers of used vehicles, owing to infrastructure development and slow pace of economic growth in the region. According to a study conducted by the International Organization of Motor Vehicle Manufacturers (OICA) in 2014, West Africa dominates the used vehicle market with the Nigeria market accounting for 400,124 imports, against the East Africa market accounting for merely 172,772 imports. In conclusion, growing industries such as oil and gas and construction are expected to represent lucrative opportunities for the used truck market.
| Study Period | 2020-2032 | CAGR | 4.3% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD XX Billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD XX Billion |
| Largest Market | North America | Fastest Growing Market | Asia Pacific |
Strong reliance on heavy vehicle transportation system for freight movements between the point of production and consumption and suppliers to market is one of the key trends contributing to the market growth. Heavy-duty (HD) trucks are important in overall transportation energy consumption. According to Energy Information Association (EIA) Annual Energy Outlook (AEO), HD trucks consume about 20% of the fuel for transportation in the U.S., and this share is expected to reach almost 30% by 2050. However, the average price of HD trucks is approx. USD 30,000–USD 40,000, which is not affordable for many small-scale enterprises. This compels the enterprises to switch to used trucks for reducing operating costs and increasing profit margins.
North American Trade Free Agreement (NAFTA) region. NAFTA has resulted in a significant increase in the trade of goods and services and investment among the U.S., Canada, and Mexico. Cross border trade agreements in NAFTA is playing a major role in developing a highly integrated continental economy and billions of dollars in annual trade flows. The cross-border trade service with a reduced tariff has fuelled the demand for the transportation and logistics sector, thereby increasing sales of trucks in the region. At the same time, it has increased the demand for used trucks in the economy.
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Light and medium-duty trucks, comprising dump trucks, cab chassis, flatbed trucks, rollback trucks, wrecker tow trucks, box trucks, and refrigerated trucks, are extensively used in the food and beverage and manufacturing sectors. The average price of a new light and medium-duty truck is estimated to be USD 1,798, whereas a used truck would be comparatively cheaper and offer quality performance on account of dealers’ warranty regimes.
The development of the manufacturing sector in countries such as China and India has broadened the scope of application for light and medium trucks in the region. Government initiatives such as “Made in India” and “Made in China” are prominent growth factors for the manufacturing sector. On the flip side, the high cost incurred by several small enterprises in manufacturing processes is compelling manufacturers to seek cost-effective alternatives for post-manufacturing processes such as logistics and transportation. The search for cost-effective alternatives is expected to translate to a switch from new trucks to used trucks in the region, thereby presenting lucrative opportunities for market growth.
The construction industry exhibits strong demand for the hauling equipment used to move drilling and building supplies, soil, and other materials. Hauling equipment used in the construction sector includes a range of heavy-duty trucks such as excavators, dump trucks, and hauling trucks. The increasing demand for powerful trucks in the construction sector on account of the need for material transportation over varied terrains is a key driver for this segment.
It has been observed that some drivers prefer used or refurbished trucks over new ones as they are relatively more powerful and sturdily built. Prominent markets for used trucks in this segment are developing regions, such as the Asia-Pacific and the Middle East. The construction segment is expected to account for a 30.79% share of the used truck market during the forecast period.
The COVID-19 has resulted in the shutdown of factories and manufacturing units all across the world. Due to travel bans and social restrictions, production has come to a halt, deeply affecting the market economy. The COVID-19 pandemic has had a swift and severe impact on the globally integrated automotive industry. There have been disruptions in exports, large-scale manufacturing interruptions across Europe, and the closure of assembly plants in the U.S. Therefore, placing intense pressure on an industry already coping with a downshift in global demand and likely leading to increased merger and acquisition activity.
