Sumit Garg is the MD and Co- Founder of Luxury Ride, a final shopping destination for the foremost exclusive and fascinating pre-owned luxury cars. Sumit was born to a business family, the path to entrepreneurships was always given. He has completed engineering from RVCE engineering college and right after his college he founded KoiBhiCar.com in 2012, an online marketplace for pre-owned luxury cars. After a quick realization about the industry, Sumit shifted his business to an offline model and established Luxury Ride in 2015 along with his two friends. At Luxury Ride, Sumit oversees various departments and his prime focus is exponential expansion of Luxury Ride across India. He is also highly involved in the day-to-day functioning of the company in order to get the DNA right which can support the exponential business growth and create a strong foundation.
A lot of buzz has been created around pre-owned luxury cars in recent years. The new age consumers are constantly on the lookout for options bringing about the unification of luxury, comfort, convenience, entertainment, safety, advanced technologies, etc. in the same model. But the current market scenario of the new car is portraying a discouraging landscape owing to the increasing input costs along with the inflationary pressure. This has substantially made purchasing a new car an expensive affair, for which the Indian consumers are showing a great preference for pre-owned luxury vehicles to experience extravagance within budget. Therefore, this desire to own a premium car with the surety of big brand names is giving the required impetus to the pre-owned luxury car segment.
Having looked at the factors driving the growth of the pre-owned car market, let’s explore some of the industry trends which are contributing to the expansion of the segment.
1) Luxury in vogue
With increasing liberty in disposable income, people have been gradually shifting towards a luxury lifestyle. Owning a luxury car is a sign of upgradation but people are being conscious enough to chase their aspirations without disturbing their financial stability. As a result, purchasing a pre-owned luxury vehicle emerges as the most viable solution to meet their diverse demands. It is seen that consumers previously owning premium sedans like Toyota Corolla, Honda Civic, etc. are upgrading to pre-owned luxury cars. A trend has emerged where the demand for pre-owned cars in the bracket of Rs 25-30 lakhs has doubled. In this, even the SUV owners in the price range of Rs 15-20 lakh are upgrading Rs 25-30 lakh bar pre-owned luxury cars.
Amongst the first-time luxury car buyers Mercedes Benz C Class, BMW X1 and Audi A6 are the most preferred models in the pre-owned car segment. In addition to this, car models like Mercedes Benz CLA and C Class, the Jaguar XE, and the BMW X1 are also popular in the segment. Prominent organized luxury car dealers have recorded month on month increase in their sales. Also, among the Indian consumers, Scorpio and Fortuner are topping the list.
2) Luxury trend penetrating into tier II cities
As per the market trends of the previous year, tier II cities are offering a new market for pre-owned cars as compared to tier I cities. In 2021, the tier II cities registered a growth of 45% as compared to 40% showcased by tier I cities. Here, tier II cities have the advantage of a low consumer base which is giving them an upper hand over the others. As per the recent research by CRISIL, there was a steep increase in demand for pre-owned vehicles in the first half of 2022. In this BMW emerged as the most popular brand with Mercedes Benz, Audi, Jaguar, Porsche, etc. immediately following suit.
3) Three-Row SUVs topping the affordability lis
SUVs or Sports Utility Vehicles have always taken the market by rage. It boasts a wide range of options from entry-level subcompacts to full-size three-row SUVs that are available in all shapes and sizes. But in case a person is seeking a budget-friendly option, for them, three-row SUVs like Ford Endeavor, Toyota Fortuner, MG Hector Plus, etc. are the best option available in an affordable range.
4) Emergence of an approachable market
Previously great stigma was attached to the pre-owned vehicle sector. With only local players ruling the market, customers were highly skeptical about the reliability of the car. But with the industries undergoing a digital shift in the recent year, there was the emergence of various organized players who brought about the unification of both online and offline assets to offer a seamless omnichannel experience. All this was aimed at bringing about the confluence of continual engagement and personalized experiences to give the customers an end-to-end experience. Industry leaders in the segment have been innovating to create a go-to-market approach aimed at meeting the evolving customer needs. From offering products to after-sales service, easy financing options, and insurance, the organized players are bringing about the unification of varied services under a single platform with the guarantee of genuine parts.