With the second-hand luxury car market gradually evolving in India, a Bimmer or a Mercedes or the third German beauty, Audi, are now within the ‘affordable’ range of the car aficionado who wants more than just the simple pleasures of life. That’s because the big three from Germany—Mercedes, Audi and BMW—are looking to widen their constituency in India by making ‘pre-owned’ (aka second-hand) cars available to the public.
While Mercedes calls its pre-owned car programme ‘Proven Exclusivity’, BMW calls it ‘Premium Selection’ and Audi terms it ‘Approved Plus’.
The move is well-timed. Experts say the pre-owned luxury car market is growing at 40 per cent whereas passenger vehicle sales (for new cars) is growing only at a paltry 9.94 per cent. So why is the pre-owned luxury car market suddenly on the upswing? Amit Singh, who heads the Mercedes division of Delhi-based T&T Motors, says: “With rapid increase in disposable income, many mid-level professionals now want foreign cars. They cannot afford the `25-lakh-plus range of new cars so they scout for second-hand luxury brands. We sell between 12 and 25 such cars a month, with demand growing every month. The cars are carefully chosen, refurbished 360 degrees and only then brought to the shop floor for sale.”
Manas Dewan, general manager, corporate communications & strategic planning for Mercedes-Benz India’s ‘Proven Exclusivity’ division, attributes the strong demand for used cars to “India’s growing luxury car market, the presence of unorganized players in the pre-owned cars business and lack of direct used car imports due to the taxation structure”.
He adds: “There is a strong demand for Mercedes-Benz cars in the market which is also endorsed by the high residual value of our products.” Mercedes-Benz India sold 1,000 units in Jan-Oct 2012 period through its ‘Proven Exclusivity’ business. This was a 40 per cent jump over the same period in 2011. Delhi and Mumbai are the main contributors to the growth.
Over at BMW, there are seven ‘Premium Selection’ showrooms across the country; the company says all are doing “brisk business”. Dr Andreas Schaaf, president, BMW India, says: “A BMW ‘Premium Selection’ vehicle offers an entry into the world of driving pleasure and is a 100 per cent BMW car, without any exception. We stand behind every BMW ‘Premium Selection’ vehicle for guaranteed quality and premium services. In fact, the BMW ‘Premium Selection’ is an official promise of quality to demanding customers which guarantees certain standards.” On being asked to compare the price differential between a new and pre-owned BMW, an official at Premium Selection, on conditions of anonymity, says: “The used cars are cheap. But we can’t put a number to it because it depends on the model, condition of the car and the kilometres it has done before being put up for resale”.
Audi, which is in fierce competition with its rivals in the new car segment, is also joining the pre-owned car race this month. The company plans to open ‘Approved Plus’ showrooms across select metros in the next 4-5 years alongside the existing Audi showrooms. Some 8 to 10 Audi cars will be showcased at these showrooms; none of the cars will be more than five years old.
Sources say, while a spanking new Audi A4 costs around `34.6 lakh, a 2009 model from the ‘Approved Plus’ store will set buyers back by just `18-19 lakh.
While the pre-owned car phenomenon is still comparatively new in India, all the big brands expect a lot of traction in the segment owing to the easy availability of disposable income and the high brand consciousness, especially in the Indian metros. Time will tell, as the cliche goes. Watch this space.
