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Luxury at a marked-down price

Source : BUSINESS_STANDARD
Last Updated: Fri, Sep 13, 2013 23:10 hrs
A worker cleans a parked car at the Maruti Suzuki's stockyard on the outskirts of Jammu

Who doesn't want to buy a luxury car? Aspiration has never been so high in India as now, when all the major luxury car makers have their own plants and sales facilities in the country. Buying these luxury vehicles, though, can be a daunting proposition given the prices. But did you know you could be sitting behind the wheels of a super sedan after shelling out a lot lot less? Of course, you - yes, more your ego than people around you - would also have to accept that you are driving a used car.


Once a car drives out of the showroom, its price comes tumbling down. Once dismissed by the cognoscenti as "second-hand" ware, older cars are, however, no longer ignored by the drooling class. Even the terminology reflects the growing acceptance of owning such vehicles - instead of "second-hand" cars, you today have "pre-owned" or "used" cars. The demand for pre-owned luxury cars has been steadily rising, while the figures for new cars have remained, at best, stagnant in these times of uncertain economics. A new luxury car in the price range of Rs 30-50 lakh will become, with the passage of a couple of years, a more affordable Rs 17-25 lakh.

The used-car segment has always been considered with suspicion as the majority of the market is still run by unorganised dealers. Much changed when car makers, from Maruti to Ford, actually began retailing pre-owned models from their own stables, often as part of a business strategy to sell a newer model in exchange for an older one. The luxury car, however, remained aloof to all this.

Things, however, took a new turn in June 2010 when Mercedes-Benz launched its pre-owned luxury range, the 'Proven Exclusivity'. "Currently, an estimated 90 per cent market of the pre-owned car market is unorganised in India. The unorganised market very often leads to incompetence in trading which results in customer dissatisfaction," says Eberhard Kern, managing director and CEO, Mercedes-Benz India. "Through 'Proven Exclusivity', Mercedes-Benz strives to craft a more organised market by ensuring clearly defined processes, evaluation criteria and regular audits in line with its global practices." Kern adds that with lack of direct used-car imports due to the taxation structure, a strong potential for this market exists in India. That is the reason the German company decided to re-sell its cars to new buyers.

With premium car makers setting up shop in this segment, it not only gives a first-time luxury-car buyer the confidence to splurge on an already owned Mercedes, BMW or an Audi, but it also helps the brand to bring in credibility in the used-car market. As Philipp von Sahr, president, BMW Group India, puts it, "This ensures ultimate peace of mind."

BMW entered the used car market with 'Premium Selection' in 2011, and to make sure that quality is not compromised in any way all their vehicles go through a comprehensive 360-degree check and are completely refurbished technically and visually. All cars selected under BMW Premium Selection are less than five years old and would have logged under 120,000 km. "BMW Premium Selection has the finest range of pre-owned BMW vehicles that are carefully selected and comprehensively examined for quality," claims von Sahr.

Transparency, a hassle-free experience and world-class assurance are what Audi, BMW and Mercedes-Benz swear by. Audi recently joined the pre-owned bandwagon with its Audi Approved: Plus Program. The Bavarian company believes the need of the hour is a scheme that allows enthusiasts to upgrade and enjoy the "sportiness, sophistication and progressiveness" of Audi cars.

It is not all about getting a luxury car at a fairly affordable price. All these vehicles are backed by additional warranty. The 'Proven Exclusivity' cars come with a standard warranty of 12 months. "We also offer customers an additional channel to choose from, along with an opportunity to upgrade from their existing vehicles to a new Mercedes-Benz vehicle through the trade-in route," explains Kern.

BMW Premium Selection vehicles, on the other hand, come with a warranty covering up to 24 months of use or 200,000 km of driving (whichever is earlier). "BMW Premium Selection owners also have the option of taking BMW India Roadside Assistance which is available 24 hours a day, 365 days a year," says von Sahr. Audi has managed to up the ante as it offers a two-year, unlimited kilometers warranty, which is a first in the segment. Also, it is the only company that offers a 30-day exchange policy.

All the three companies have customised and attractive finance schemes for the upwardly mobile middle class. They offer affordable equated monthly installments (EMI), low down payment, competitive interest rates and the best exchange price for the buyers' old cars. Will there be enough cars to satisfy the cravings of a burgeoning group of aspirants? Well, according to a head of operations of a leading sports car company, a typical luxury car owner changes his car frequently, maybe every two or three years. This seems to indicate that the supply of luxury pre-owned vehicles will not dry up. And besides the companies' own vetting of the old car, the buyer can also rest assured that most of the first-hand owners can be presumed to own a couple of other high-end cars - so the vehicles would have not have been pressed into demanding service. Nor would they have been maintained poorly. Therefore, a new set of emerging buyers ends up spending on a well maintained and a relatively new car.

What's on offer?
  • Prices can be 50 per cent lesser than new car prices
  • Warranty up to 2 years
  • Exchange and upgrades to bigger vehicles
  • Affordable EMIs and car loan rates

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