In India, luxury used car market is in the fast lane

The new car market is estimated at round 30,000 models a yr in gross sales in a superb yr, whereas the used car market for luxury autos is estimated at round 60,000 automobiles yearly.

Pavan Lall stories.

IMAGE: BMW 3 Series Sedan. Photograph: Kind courtesy, BMW India

Premium German car-makers Audi, BMW and Mercedes-Benz eternally grapple with the problem of excessive import duties coupled with a client tradition that is solely now coming to phrases with conspicuous consumption.

The silver lining for them is beginning to seem in the type of rising used luxury car gross sales as volumes begin to slowly accumulate over the years.


The new car market is estimated at round 30,000 models a yr in gross sales in a superb yr, whereas the used car market for luxury autos is estimated at round 60,000 automobiles yearly, say automotive executives who watch the sector keenly.

BMW India, which arrange its used car programme referred to as BMW Premium Selection in 2011, says demand has seen the ratio of gross sales enhance to 2:1 for brand new to used automobiles.

That is a transfer upwards from earlier, says Vikram Pawah, president, BMW India.


IMAGE: BMW X1. Photograph: Kind courtesy, BMW India

“That’s been extra noticeable in the final 12 months as individuals proceeded to purchase automobiles which can be used versus model new ones.

“This was the very same factor we noticed throughout the Lehman Brothers monetary disaster,” he provides.

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

“Since its inception, BMW Premium Selection has bought greater than 10,000 pre-owned automobiles.

“The highest-selling fashions embody BMW 3 Series at round 2,500 models, BMW 5 Series (round 2,500 models) and BMW X1 (round 2,000 models).”

Mercedes C-Class Sedan

IMAGE: Mercedes C-Class Sedan. Photograph: Kind courtesy, Mercedes-Benz India

Martin Schwenk, nation head for Mercedes-Benz, says that the used car enterprise has been equally constructive for them as nicely.

“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, including, “Pre-owned cars from Mercedes-Benz and its dealers are listed on our online store.”

He says the ratio of used Mercs to new ones is 1:4.

That is, 25 per cent of their gross sales come from used automobiles, which underscores the significance of the phase.

Audi S5 Sportsback

IMAGE: Audi S5 Sportsback. Photograph: Kind courtesy, Audi India

Audi India’s pre-owned car programme referred to as Audi Approved: plus has registered a progress of over 20 per cent in the final couple of years, says Balbir Singh Dhillon, head of the programme.

“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.”

So which automobiles are most in demand? It relies on who is promoting them.

Land Rover Defender

IMAGE: Land Rover Defender. Photograph: Kind courtesy, Land Rover India

Pawah says that for BMW, the 3 Series is all the time the hottest draw “as it’s a car that embodies what BMW is all about in many ways”.

It’s an analogous pattern for Mercedes-Benz.

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

“We are additionally witnessing elevated demand in the new-generation automobiles portfolio.

“The CLA and the earlier technology GLA are additionally in good demand.”

Lamborghini Urus

IMAGE: Lamborghini Urus. Photograph: Kind courtesy, Lamborghini

Those who mixture luxury automobiles see a blended bag.

“Hot-sellers have been the Mercedes-Benz G-Wagon, Range Rovers, Lamborghini Urus, the BMW X7,” says Jatin Ahuja, founding father of luxury auto retailer Big Boy Toyz.

He provides that this is the first time they’re seeing a provide constraint, one thing that has by no means been a problem in the previous.

“July has been the toughest buying phase and the volume of cars is simply not there,” he says.

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

Mercedes G-Class

IMAGE: Mercedes G-Class. Photograph: Kind courtesy, Mercedes-Benz India

So who is the used car buyer? Schwenk says, “A pre-owned buyer prefers to improve his buy, seems to be for high-value return in the buy, and is extremely aspirational.

“We have seen plenty of these clients personal a pre-owned car earlier than shifting to a brand new luxury car a couple of years later.”

Or as Pawah places it: “Mainly it’s the individuals who need luxury however are worth acutely aware.

“And whereas they’re able to drive luxury automobiles, they need the certifications and warranties, which organised sellers provide.”

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