{"id":113329,"date":"2021-05-01T05:38:40","date_gmt":"2021-05-01T05:38:40","guid":{"rendered":"https:\/\/fin2me.com\/?p=113329"},"modified":"2021-05-01T05:38:40","modified_gmt":"2021-05-01T05:38:40","slug":"in-india-luxury-used-car-market-is-in-the-fast-lane","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/in-india-luxury-used-car-market-is-in-the-fast-lane\/","title":{"rendered":"In India, luxury used car market is in the fast lane"},"content":{"rendered":"

The new car market is estimated at around 30,000 units a year in sales in a good year, whereas the used car market for luxury vehicles is estimated at around 60,000 cars annually.<\/strong><\/p>\n

Pavan Lall reports.<\/strong><\/p>\n

<\/p>\n

Premium German car-makers Audi, BMW and Mercedes-Benz forever grapple with the challenge of high import duties coupled with a consumer culture that is only now coming to terms with conspicuous consumption.<\/p>\n

The silver lining for them is starting to appear in the form of growing used luxury car sales as volumes start to slowly accumulate over the years.<\/p>\n

The new car market is estimated at around 30,000 units a year in sales in a good year, whereas the used car market for luxury vehicles is estimated at around 60,000 cars annually, say automotive executives who watch the sector keenly.<\/p>\n

BMW India, which set up its used car programme called BMW Premium Selection in 2011, says demand has seen the ratio of sales increase to 2:1 for new to used cars.<\/p>\n

That is a move upwards from earlier, says Vikram Pawah, president, BMW India.<\/p>\n

<\/p>\n

“That’s been more noticeable in the last 12 months as people proceeded to buy cars that are used versus brand new ones.<\/p>\n

“This was the exact same thing we saw during the Lehman Brothers financial crisis,” he adds.<\/p>\n

“BMW sold around 6,600 cars last year, with around 1,600 used cars in addition, through its Premium Selection channel,” Pawah says.<\/p>\n

“Since its inception, BMW Premium Selection has sold more than 10,000 pre-owned cars.<\/p>\n

“The highest-selling models include BMW 3 Series at around 2,500 units, BMW 5 Series (around 2,500 units) and BMW X1 (around 2,000 units).”<\/p>\n

<\/p>\n

Martin Schwenk, country head for Mercedes-Benz, says that the used car business has been equally positive for them as well.<\/p>\n

“We have seen encouraging momentum in the last couple of years in our pre-owned car business, which is run under the Mercedes-Benz Certified global brand,” he says, adding, “Pre-owned cars from Mercedes-Benz and its dealers are listed on our online store.”<\/p>\n

He says the ratio of used Mercs to new ones is 1:4.<\/p>\n

That is, 25 per cent of their sales come from used cars, which underscores the importance of the segment.<\/p>\n

<\/p>\n

Audi India’s pre-owned car programme called Audi Approved: plus has registered a growth of over 20 per cent in the last couple of years, says Balbir Singh Dhillon, head of the programme.<\/p>\n

“The pre-owned cars business helps us target entry-level customers who wouldn’t otherwise look at owning a luxury car. We are focused on sell­ing every car at least twice — if not more.”<\/p>\n

So which cars are most in demand? It depends on who is selling them.<\/p>\n

<\/p>\n

Pawah says that for BMW, the 3 Series is always the most popular draw “as it’s a car that embodies what BMW is all about in many ways”.<\/p>\n

It’s a similar trend for Mercedes-Benz.<\/p>\n

“Mercedes-Benz India’s best-selling models in the used domain are the C-Class and E-Class sedans,” Schwenk says.<\/p>\n

“We are also witnessing increased demand in the new-generation cars portfolio.<\/p>\n

“The CLA and the earlier generation GLA are also in good demand.”<\/p>\n

<\/p>\n

Those who aggregate luxury cars see a mixed bag.<\/p>\n

“Hot-sellers have been the Mercedes-Benz G-Wagon, Range Rovers, Lamborghini Urus, the BMW X7,” says Jatin Ahuja, founder of luxury auto retailer Big Boy Toyz.<\/p>\n

He adds that this is the first time they are seeing a supply constraint, something that has never been a challenge in the past.<\/p>\n

“July has been the toughest buying phase and the volume of cars is simply not there,” he says.<\/p>\n

“If there was sufficient inventory, business could have grown by 100 per cent instead of over 30 per cent, which we recorded.”<\/p>\n

<\/p>\n

So who is the used car customer? Schwenk says, “A pre-owned customer prefers to upgrade his purchase, looks for high-value return in the purchase, and is highly aspirational.<\/p>\n

“We have seen a lot of these customers own a pre-owned car before shifting to a new luxury car a few years later.”<\/p>\n

Or as Pawah puts it: “Mainly it’s the people who want luxury but are price conscious.<\/p>\n

“And while they are ready to drive luxury cars, they want the certifications and warranties, which organised sellers offer.”<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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