Chennai: Consistent growth of luxury cars for over five years has spawned the growth of a new category of vehicles in the Indian market: the used luxury cars. The general tendency of people to trade their four-year-old cars for newer models has resulted in an increased supply of used marque models in the market.
“We have seen an average growth of about 20 per cent in the luxury category of used cars,” confirmed Umang Kumar, CEO of Gaadi.com, the auto portal specialising in used car sales.
“With the average luxury car holding time among folks in India varying from around 3-4 years, there is an abundant supply of older models into the market which are being readily picked up by customers,” he said.
About four years ago, the total size of the luxury car segment in the country was about 12,000-13,000 vehicles per year. However, the brisk pace of this segment despite auto slowdown has expanded this market to about 34,000-35,000 vehicles on an annual-basis.
As the inventory supply of new models has gone up, there is a subsequent increase in the second hand segment with people opting for latest cars.
Confirming the trend, K. Subramanian, MD of Audi Chennai, said, “Around 8-10 per cent of our sales are from customers who want to change their old luxury cars.”
The key driver for this growing category is the huge price difference between new and second-hand cars. “In a 3-4-year-old luxury car, a neat 50-60% of the cost is shaved off the original price,” he said.
A car that cost about Rs 40 lakh in 2009 is now available for Rs 15-20 lakh. “This is the key driver for aspiring businessmen and corporate honchos who want to flaunt a luxe model and yet can’t afford a new car,” he added.
Also, most luxury car owners always own more than one vehicle and hence the usage of these cars is minimal. “This is the biggest driver in second hand market where value-conscious and aspiring customers get a sparsely driven luxury car at half its price,” said Kumar.
