How BS6 emission norm is hurting used cars sales in India

The used car sales have been partially affected by the coronavirus pandemic but the bigger culprit is the BS4 discounts that are being offered.

By:Updated: April 13, 2020 6:31:27 PM
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The retail car and motorcycle sales have been affected heavily due to the lockdown as well as factories that are shut at the moment. The last thing on anyone’s mind right now will be to purchase a car. While the mainstream industry is aware that this phase might be a long time away from remission, the used car division too thinks on the same lines. The used car section is also affected big time by the BS4 to BS6 shift. Used car dealers, Express Drives spoke with, confirmed that the superb deals offered by manufacturers to clear their existing BS4 stock is playing havoc. Customers prefer to extend their budget and now buy a bigger vehicle for perhaps a Rs 2 lakh discount than go for a used one. The customer is the winner here as they get an all-new vehicle, warranty as well as higher resale value assurance.

Jatin Ahuja, founder, and MD, Big Boy Toyz said that ” The pre-owned luxury car market is facing a huge consequence of BS6 shift for the period of over the last six months. BS6 has impacted our sales exceptionally. In order to clear out the BS4 stock, various companies like Mercedes, BMW, Audi, Maruti and many more are selling out their BS4 stock at a much lower cost, incurring huge losses in the procedure. The new cars are available in the market at a huge discount because of being obsolete post-March 31, 2020; the sale of pre-owned cars has been adversely affected.”

Jatin further said that digitalisation is the keyword in this time of crisis. At present, BBT has a vast reach of more than a million people on their digital platforms. In a short time, the evolving game of digitalisation has played a massive role in gaining wider reach and increasing revenue as well as customer base for BBT.

We contacted India’s premier used car dealer, Mahindra First Choice, for a comment. Ashutosh Pandey, MD and CEO, Mahindra First Choice Wheels said, “The used car market has performed reasonably well during FY20, especially when compared to the new car sales. In volume terms, used cars grew by 10% over the previous year, ending the FY at 4.4 million units. This was despite the uncertainty and lockdown during March.”

“We have provided listings of all our vehicles on www.mahindrafirstchoice.com to our customers and the traffic on these sites has increased significantly. A recent consumer research that we conducted, has indicated that a large proportion (over 60%) of our customers have affirmed that they would purchase the vehicle of their choice within the next three months. So while sales activity is suspended until the lockdown is in place, our digital interfaces and personal discussions with prospective customers has given very positive results.”

A couple of First Choice dealers though said that at this point in time, they are only using their digital platform. The advertising is done online while if the customer likes the product, they call and also transfer a fully refundable token amount. Once the lockdown is over, the customer can see and experience the product. If they like it, then the deal is closed, else the money is refunded.

Speaking of digitalisation, most luxury carmakers have already resorted to using their online platforms for sales. This is going to be the trend even after this pandemic is over. What do you think?

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