Chennai: Just say Maruti Mantra.
Luxury and premium car makers such as Mercedes Benz, Audi, BMW, MG Motor and others are increasingly aggressive with their used car platforms as a pandemic to pinch the consumer budget.
Like the mass market brand, Luxe Brigade stepped on the gas to bring the first buyer into the brand fold but at a lower price point.
Car marketers say the contribution of the former business is now a fairly large 10-15% and the company is now pushing for network expansion only use.
Take Mercedes Benz India which usually sell more than 2,000 pre-owned cars a year led by markets such as Mumbai and Delhi.
With trading penetration of 10-12% of this segment has become very important for the brand during the pandemic years.
Martin Schwenk, MD & CEO, Mercedes Benz India, said: “We are very bullish about the car business that has been previously owned and as part of our improvement recently launched an innovative ‘Marketplace’, the model directly to customers with which we expect that business previously owned to grow 50% per year and increase online penetration to 30% of the total pre-owned business in 2022.
“Now online consists of 20% of pre-owned sales for Mercedes Benz India.
Others like BMW, which sells between 1,400 and 1,700 used vehicle units per year, bet on a service package under the BMW premium selection using vertical cars.
All cars under this platform are equipped with a 24 month / 40,000 km warranty such as the Joy Rewards scheme that offers a 14-30% discount on the cost of service and 2-year roadside assistance now De Rigueur.
“Buying a previously owned BMW vehicle allows customers to enter the BMW world and experience products, customer service, sales and after-sales which are important decision-making factors for customers who see the purchase of new cars in the future,” said a company spokesman.
BMW has sold 663 units in the January-July period of this year.
Used car marketers say that most of the uptick in a used luxury car comes from a replacement buyer.
Ashutosh Pandey, CEO, Mahindra First Choice Wheels, said: “There must be an uptick in demand and most of the sales occur from a new car dealer from luxury brands because the significant part of the customer is a substitute buyer.” Not surprisingly car companies expand their used business networks.
Take the MG Premium MG motorbike that wants to extend the MG of used business insurance from 30% of its current dealer up to 100% next year, said MD Rajeev Chaba.
“It’s been 10% of our business coming through an exchange program, and we will improve this forward,” he said.
Ditto for Audi India who wants to double the pre-owned network.
Balbir Singh Dhillon, Head of Audi India, said: “We will take Audi’s official showroom that is approved by Audi from 7 to 14 by the end of this year which along with 40 plus rural workshops that will support previous sales.” Used car business, he added, is very important now because “he gets the first buyer into the Audi fold and keeps a profitable dealer network.”