The global crisis that has surfaced due to the pandemic has smacked the automobile sector very harshly. It will take a few years for the sectors such as travel and tourism, manufacturing, hospitality, and automobile to resuscitate. However, the automobile sector, particularly the car market, also secures a new set of customers such as women buyers travelling to their workplaces, inter-city travellers, and aspirational buyers from Tier-2 and Tier-3 cities.
The year 2020 saw a deep decline in the Indian Luxury car market of about 40%. However, recovery was seen post uplifting of lockdowns but at a sluggish pace. The year 2021 was predicted to be the year for replacement purchases and expansions; however, disturbingly, the crisis has thwarted at unexpected levels. Some prospective customers have postponed their purchases because of economic instability and the reimplementation of lockdown in the Nation. The industry behemoths are, however, expecting a greater demand from Tier- 2 and Tier-3 cities post Lockdowns. They are now strategising their promotions for pre-owned luxury cars towards these cities.
A more extensive set of customers from these cities will move towards pre-owned luxury cars than buying brand new ones to showcase extravagance within budget. Luxury cars in Indian markets were primarily demanded by elite classes having ultra-high net worth and massive disposable income willing to buy state-of-the-art. Nevertheless, with the popularity of the pre-owned luxury car market segment, owning a slice of luxury is a big shot dream come true for ordinary individuals as well.
However, the fiscal and monetary measures and the other government norms will help ease the burden of car marketeers. With the transition from BS-IV to directly BS-VI norms and skipping BS-V norms, the Indian government has moved in a much environmentally responsive manner. However, to implement this, automobile manufacturing companies need to make considerable investments in technologies to comply with the norms and retain automobile performance. This will lead to an upsurge in the prices of new cars, which in-turn will increase the demands for pre-owned cars. The market has already started observing the impact.
With contracted financial budgets due to the worldwide pandemic, the demands for pre-owned segments will rise. Cess reduction will also help the luxury car market to expand its wings in India and assist giants in attaining sales volumes.
The sales outlook looks promising for pre-owned luxury cars in the upcoming years. Changing trends, upcoming demands from remote locations, consumer-friendly government policies, and technological advancements predict the desire for pre-owned luxury cars to go up by 35% – 40%.
To spread brand awareness, giants are making a smart move by making their online presence more vibrant. In the post-pandemic scenario, digital sales through virtual walkthroughs will be more sustainable. In these stressed times, prospective buyers will only remember first movers offering digital client experience with a futuristic plan of action. Sellers must be prepared with omnichannel selling experiences to deal with the altering landscapes of revenues and margins that are knocked tough due to the pandemic.
Author: Jatin Ahuja, Managing Director, Big Boy Toyz
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
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