Luxe Brigade of Car Makers Stepping on Gas on Used Car Platforms

Call it the Maruti mantra. Luxury and premium car makers like Mercedes Benz, Audi, BMW, MG Motor and others are getting aggressive with their used car platforms as the pandemic pinches consumer budgets.

Like mass-market brands, the luxe brigade is stepping on the gas to bring in first-time buyers into the brand fold but at a lower price point. Car marketers say the contribution of the used business is now a sizeable 10-15% and companies are now pushing for a used-only network expansion spree as well.

Take Mercedes Benz India which typically sells over 2,000 pre-owned cars a year led by markets like Mumbai and Delhi. With a trade-in penetration of 10-12% 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 our pre-owned car business and as part of scaling up we recently launched an innovative ‘Marketplace’, a direct-to-customer model with which we expect our pre-owned business to grow by 50% annually and increase online penetration to 30% of our total pre-owned business in 2022.” Currently online comprises 20% of pre-owned sales for Mercedes Benz India.

Others like BMW, which sells between 1,400 and 1,700 units of used vehicles a year, are betting on service packages under its BMW Premium Selection used car vertically. All cars under this platform come with a 24 months/40,000 km warranty Add ons like the Joy rewards scheme offering 14-30% off on service cost and 2-year roadside assistance are now de rigueur.

“Buying a pre-owned BMW vehicle allows the customers to enter the world of BMW and experience the product, customer service, sales and after-sales which is an important decision making factor for customers looking at a new car purchase in the future,” said a company spokesman. BMW has sold 663 units in the January-July period this year.

Used car marketers say that a large part of the uptick in used luxury cars is coming from replacement buyers. Ashutosh Pandey, CEO, Mahindra First Choice Wheels, said: “There is certainly an uptick in demand and most of the sales are happening from new car dealerships of the luxury brand since a significant section of the customers are replacement buyers.”

Luxe Brigade of Car Makers Stepping on Gas on Used Car Platforms
ELE Times

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