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How can we estimate the market size of second hand cars

Richa asked on Oct 04, 2018 - 1 answer
Benjamin replied on Oct 05, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Hi,

1. Number of cars out there

  • start with population
  • segment by age to identify drivers
  • assumme an avergae # car / driver (should be <1 !)

2. Number second hand cars

  • Assume a share of total fleet that create a turnover due new cars purchase, and old cars destruction
  • Substract this to total number of cars calculated in 1.

3. Number of transaction for second hand cars

  • Assume an average duration of holding a car (5 years ?)
  • divide the number Calculated in 2 by this 5 years

4. Market of second hand cars

  • Assume an average value per transaction on second hand market (15 000 $ ?)
  • Multiply this 15 000$ by the number of transaction calculated in 3.

Hope this helps

Best
Benjamin

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