Monday, September 26, 2022

Pre-owned luxury cars finding strong footprint in lower-tier cities: Sumit Garg, Luxury Ride

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The pre-owned car market in India is bulging fast. With the rapid growth in personal mobility space and gradual recovery of the economy and consumer sentiment, demands for pre-owned luxury cars too are increasing fast.

The pre-owned car market is rapidly growing in India, especially in the light of the pandemic that has accelerated demands for personal mobility driven by the fear of contamination and the requirement of social distancing. While the mass-market cars dominate the pre-owned car space, luxury cars too are finding an increasing footprint in the segment. The Indian pre-owned car market is estimated to reach a size of over 7 million vehicles by FY2026. Keeping pace with this momentum, the pre-owned luxury car market too would grow.

Team AFT had a conversation with Sumit Garg, MD and Co-founder of Luxury Ride to understand the market situation better.

Edited excerpts are below.

Q. What is the current status of the Indian luxury pre-owned car market?

In recent years, the changes happening in the automobile industry are giving just the right mix for the growth of the luxury pre-owned car market as a whole. The reducing ownership cycle, increase in disposable income, changing consumer behaviour, etc. are cumulatively responsible for the rising demand for pre-owned luxury cars.

The current millennial class is showing great aspirations to own a luxury car but does not want to compromise on their financial stability. Hence, they consider pre-owned luxury cars as the most viable option giving them uncompromising performance along with advanced features that too at the cost of the economical new car which is a better bargain for them as compared to going for a new car.

This millennial population is emerging as the potential buyers of the pre-owned luxury cars and the majority of the consumer base giving the desired impetus to the luxury pre-owned car market in India. The pandemic further strengthened the stance of the luxury pre-owned car market as people became frugal with their budget and were experiencing diminishing faith in the hygiene standards of public transport but were in need of personal mobility to commute to the office while complying with the social distancing norms.

Q. How do you see the luxury pre-owned car market in India growing by 2025?

As stated above the various revelations happening in the automobile industry are working acutely in favour of the pre-owned luxury car market. The segment is in the middle of a very promising transformation. Owing to the pandemic many organized players have emerged on the market who are bringing about rapid digitization and advanced technological integration in the segment. They are leaving no stones unturned in the realization of data monetization, in-vehicle connectivity, subscriptions, rental, charging, and long-term maintenance packages to ramp up the organization of the sector.

This is a radical step in organizing the otherwise highly fragmented segment which will be very crucial in instilling trust amongst the consumer base that will drive the exponential growth of the industry. According to industry experts, it is expected that the digital transformation will lead to the growth of the total industry sales from 20 per cent in FY21 to 30 per cent in FY26.

Luxury car

Q. Is there any specific trend in terms of consumer preferences when it comes to buying luxury pre-owned cars? Be it brands, models, body segments, features, technologies etc.

Given the customer behaviour, Mercedes Benz tops the preference list followed by BMW, Audi, JLR, and Volvo. It is an acutely SUV driven market.

Q. What is the usual consumer base for the luxury pre-owned cars in India, in terms of buyers’ age, and demography?

In recent years millennials are emerging as the potential customers of pre-owned luxury cars. Their aspiration to own a luxury car coupled with their sensitivity to stay financially stable is driving the demand in the pre-owned car segment. Moreover, the culture was first seen in the metro cities which till date stays strong but for the past few years, the segment is making strong inroads into the tier II and III cities.

Q. Luxury cars are still majorly concentrated in tier-1 cities in India. What is the status of luxury pre-owned cars when it comes to market penetration?

Since the beginning, metro cities have been the hub clocking large transactions of selling and purchasing of pre-owned luxury cars. Over the years, the stance stays strong with the maximum purchases materializing in the metro cities. But with the coming of the pandemic, there was a unanimous demand for high-end brands with unmatched performance and services that too within a limited budget in the tier 2 cities as well like Jaipur, Chandigarh, Dehradun to name a few.

Also Read: Is subsidising electric vehicles a sustainable proposition today?

Team AFT
Team AFThttps://autofintechs.com
The jack of all trades behind the Autofintechs.com

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