The used car segment in India does in no way play second fiddle to the new car market. In fact, even when the economic downturn threatened the new car sales, the used car market remained relatively immune. Keeping this in mind, luxury car maker, Mercedes-Benz has announced that it will launch a separate brand for pre-owned cars this month.
Many car makers in India have realised the importance of having a used car division. Companies like Volkswagen, Mahindra, Ford, Toyota, Hyundai, Maruti Suzuki already have their own brands. Coming to the luxury brands, both BMW and Audi do sell their used cars but not through any independent network. However, with this move, Mercedes-Benz will have a dedicated brand for its used cars. This becomes an important tool for a brand as it helps them bring into their fold those customers who cannot afford their new car.
"...The growth rate in pre-owned car (in India) is phenomenal. We (Mercedes-Benz) have seen 45 per cent growth in pre-owned car business this year," Mercedes-Benz India, MD & CEO Eberhard Kern said at an event.
"In two weeks, Mercedes-Benz India is going to launch a new pre-owned car brand....We will take the next big step in pre-owned car business," he said.
On comparing the pre-owned car segment with global markets, he observed that the Indian used car market was growing quite fast. "It (Pre-owned car segment) is the next growth story in India's luxury car segment," he observed adding, "Customers here are now demanding quality products in pre-owned (segment)."
Kern said the company would be doing pre-owned car business with existing dealers and that it will offer very effective trading price to customers. The automaker will be targeting both metro and non-metro cities (tier II and tier III) for the sale of premium segment cars with a focus on increasing product portfolios.
A rough estimation would tell us that almost three million second-hand cars were sold in India last year compared to the 2.5 million new cars and since the segment is mostly immune to demand fluctuations it seems as a profitable move as well.
In recent times, Renault is also planning to enter the used car market, an announcement it made at the sidelines of the Paris Motor Show in October.