Expect To See Major Growth In The Pre-Owned Luxury Car Segment In 2021: Industry Experts

The year 2020 is finally coming to an end, and despite all the negatives, one of the few positive changes we saw this year, especially in the automotive sector, was the growing demand for personal mobility. However, the economic constraints caused by the pandemic has affected the buying patterns of consumers as they are warier about their spending, and thus, there is an increasing focus on the pre-owned car market, and this is true in the case of the luxury car segment as well.

Also Read: Personal Mobility The Way Forward For Consumers: carandbike Survey

Industry experts say that the pre-owned car market reportedly outnumbers the new car market by 30 per cent in volume, and about 54 per cent of the potential buyers will prefer pre-owned cars. With 2021 approaching, they also believe that this trend will further grow in the coming year. Currently, some of the major players in the pre-owned luxury car segment are - Mercedes-Benz India, Audi India, in addition to multi-branded retails chains like Big Boy Toyz and Luxury Ride.

Santosh Iyer, VP - Sales and Marketing, Mercedes-Benz India says in 2021 they will mainly focus on having a refreshed inventory and a strong push on online sales

Talking about the company's expectations from 2021, Santosh Iyer, VP - Sales and Marketing, Mercedes-Benz India, said "We expect pre-owned car (POC) business to continue its growth trajectory which currently is at a strong 20 per cent y-o-y level, and keep outpacing the new car sales growth. We have a comprehensive POC business strategy for 2021 aimed at further strengthening our dominant market position in this segment, by offering an enriched product portfolio and brand experiences to the customers." Iyer says that in 2021, Mercedes-Benz Certified, the company's pre-owned car business, will mainly focus on having a refreshed inventory and also a strong push on the online sales of pre-owned cars. Currently, 15 to 16 per cent of Mercedes-Benz Certified's pre-owned car sales come from online channels.

Also Read: Pre-Owned Premium Car Chain Luxury Ride To Open 50 New Showrooms By 2023

Luxury Ride has forayed in the pre-owned exotic sports car segment and says 10 per cent of its total stock will be sports cars in 2021

At the same time, Luxury Ride's MD & Co-founder, Sumit Garg, said "The year ahead looks promising for both Luxury Ride and for the industry as the preference of consumers has majorly shifted as they are opting for personal mobility, as it is much safer and gives a sense of belonging. People now prefer pre-owned luxury cars over new cars as they are mindful about spending and are choosing a product that provides them value for money equivalent to a new car in a much lesser price." The multi-brand luxury car chain is aggressively expanding its footprint in India, and the company says that in the coming year, it will foray into tier II, III cities of India like Ahmedabad, Indore, Pune, Raipur, Lucknow and others. "Recently, we have forayed in the pre-owned exotic sports car segment and 10 per cent of our total stock will be sports cars," Garg further added.

Also Read: Pre-Owned Luxury Car Space Growing At A Rapid Pace: Big Boy Toyz

Big Boy Toyz's Founder & CEO Jatin Ahuja says 2021 will see them exponentially increasing the company's physical stores and procure more variety of cars

On the other hand, Big Boy Toyz (BBT) is aiming at increasing its physical stores exponentially in the next year while strengthening its digital presence and adding more variety to its stock in 2021. In fact, the company says that the increase in procurement of cars has been its monthly goal. Talking about focus areas, Founder & CEO of BBT, Jatin Ahuja said, "BBT aims at Improving the Logistics as during the lockdown we faced a lot of challenges in transportation and overcoming this will be our key focus along with Strengthening our Procurement team. Increasing the stock has always been BBT's major focus and we will be working towards the same."

The Industry Experts believe SUV is the fastest-growing segment in the Indian market and their will be an increasing demand in the pre-owned car space as well

There is a massive demand for SUVs among car buyers in India, and the trend is present across all segments. Industry experts believe that this trend will be mirrored by the pre-owned car space as well. Luxury Ride's Sumit Garg said, "India has the youngest population and the youth of India prefers SUVs. SUVs continue to remain in demand and as a matter of fact, it has reported year-on-year growth. The segment, as a matter of fact, reported year-on-year growth, marking Indians love for such vehicles. This SUV love in India is not going to stop anytime soon." At the same time, BBT's Jatin Ahuja added, "SUV is the fastest-growing segment in the Indian market. We deal into multi-brands and our sells depend on the consumer preference. With people now preferring personal transport over public, SUVs have emerged as the comfort car for families leading to hike in the demand of the same"

Organised pre-owned car sellers now have the responsibility of offering improved after-sales service and smart finance options as well

With more and more consumers preferring pre-owned vehicles over new cars, organised players are burdened, with the responsibility of offering improved after-sales service and smart finance options. Mercedes-Benz Certified currently offers a warranty of 2 years/40000 km, along with financial schemes like 20 per cent lower EMI, and they also offer attractive finance options with a low-interest rate for MB Certified cars like a rate of interest of 9.99 per cent.

Luxury Ride, at the same time, said, "We have an in-house service centre and the starting price of after-sales services is from Rs. 9, 999 for the luxury cars. We have introduced a package especially for after car services at Rs. 35, 000 for 3 years which no other market players are offering at this rate." BBT, on the other hand, is working towards enhancing the terms of warranty and after-sales services and establishing more service centres across states to provide our customers with quicker services. It also offers finance options like - loan tenure options of 3-5 years, an interest rate of 12 to 14.5 per cent, and Balloon and Bullet EMI schemes.