Mercedes-Benz India Launches New Brand for Old Cars

Boosted by a 39 per cent rise in used car sales till the September quarter at 1,700 units and sensing a huge opportunity in this space, Mercedes-Benz India today launched a separate brand to cash in on the pre-owned car market.

The country's largest luxury carmaker will sell pre- owned cars under the brand, Mercedes-Benz Certified.

Till September 30, the company has sold 1,700 old cars in India, a 39 per cent jump over the same period last year. It still has around 300 units on offer, said Mercedes-Benz India Managing Director and Chief Executive Eberhard Kern.

He was talking to reporters here after announcing the launch of Mercedes-Benz Certified.

"There has been an increased demand for the pre-owned Mercs... Merc enjoys a strong equity in the market and with Mercedes-Benz Certified we will cater to this growing demand," Kern said.

The company today launched 12 pre-owned car showrooms across Mumbai, Bengaluru, Pune, Mohali, Delhi, Chandigarh, Kochi, Chennai and Hyderabad and over 150 display bays, which will be expanded to over 250 by the end of 2015. Some of these are standalone showrooms, he added.

Kern said Merc Certified will be offering everything that the company offers to a new car customer. These include financing and warranty among others.

The new brand has been developed specifically for the Indian market, he said, adding another unique offering will be letting a customer return the old car after five days if he/ she did not like the product. However, this facility will be available only on cars which are less than five years old.

Talking about the rationale for launching a separate brand, Kern said the used car market is larger than the new one in India. The ratio is 1.1:1, which means 110 old cars are sold for every 100 new ones. The used car market is much higher in the US at 4.4:1 and 2.2:1 in Germany.

Another reason is the huge latent demand in tier 2 and 3 cities for used luxury cars, he said, adding most of the cars coming for sale are the E, C and ML Class models.

In value terms, Kern said the organised pre-owned luxury car market in India is in upwards of Rs 4,000 crore.

Mercedes-Benz, which entered India in 1994, is the fastest-growing luxury car maker in the country today and is on pace to sell over 10,000 units this calendar year.