According to the Indian automotive industry’s first pricing and analytics platform, IndianBlueBook, Mercedes, BMW and Audi dominate the pre-owned luxury car market, which is still evolving. The report, ‘ Residual Value Analysis of Luxury Car Segment’, indicates that the value of any luxury brand depreciates to 50 percent in three years making them very popular in the used car market. Potential buyers also consider the total cost of ownership which is expected to be 60 percent over the on-road price of the vehicle over three years.
In the pre-owned sector, BMW cars cost more than Mercedes and Audi. However, in terms of service costs, Mercedes-Benz models cost 24 percent to 29 percent less in terms of aftersales when compared to its other German competitors. The analysis also states that online searches for pre-owned luxury cars contribute to seven percent of the total medium of searches done, out of which, only one percent gets converted into actual sales. This states that there is a high aspirational value of luxury cars in the pre-owned segment.
The recent Demonetisation move of high currency notes by the Government of India is expected to have adverse, although short-term, effect on sales of new and pre-owned luxury cars. Certification of luxury cars with warranties has also become a prime driver for this segment according to the research.
The IndianBlueBook also compared the on-road pricing of the BMW 3 Series 320i Prestige, Audi A4 30 TFSI Premium Plus and the Mercedes-Benz C-Class C200 variants. Over the on-road price of all, the analytics also added features like cruise control, GPS Navigation, parking assist, sunroof, iPod compatibility and leather interiors. Post this, the on road price (or price after addition of these features) of the C-Class came out to be lesser than the other two German carmakers. This indicates that buying a pre-owned Mercedes-Benz will be a better package over the other two.