The pre-owned luxury car industry is quite optimistic of having good sales this festive season. The arrival of the festive season stirs great excitement amongst people to purchase something new, even customers wait for this time of the year.
Purchasing new metallic items on the occasion of ‘dhanteras’ is considered to be auspicious. Keeping up with this spirit of festivity, many prefer buying cars to perfectly resonate their sentiments to cherish the occasion.
But considering the supply disruption is having a dampening effect on the new car market, the pre-owned car industry is optimistic about clocking revived sales by reaping the benefits of the volatile market.
The new car market is reeling under the influence of soaring steel prices, semiconductor shortages, and global challenges that are hurting the demand for the segment. There is a disruption in the supply chain where it is unable to meet the demand in the market, and the gap is only widening with time.
Affected by the woes of the supply chain, the OEMs are unable to offer discounts on new cars given the difficulty in procuring commodities touching high prices. All the factors cumulatively are responsible for the soaring car prices and long waiting periods which range from 6 months to more than a year.
The staggering state of affairs is discouraging the potential consumers who want the cars to be delivered at the time of the festival. Hence, looking at the dismal landscape plaguing the segment, consumers are not shying away from exploring alternative options to keep alive their festive fervor.
Closely analyzing the available options, consumers are finding solace in pre-owned luxury cars. Showing promising growth trends, the pre-owned luxury car market has registered a growth of 15% CAGR in the first half of 2022.
Even against the sharp rise in demand for pre-owned luxury cars, the segment has been able to meet the market demand. This has proved to be a major factor in earning customer satisfaction.
This has encouraged consumers to opt for the pre-owned luxury car, as they do not want to miss the car delivery during the festival, and at the same time want to strike a reasonable deal that does not leave them financially overburdened.
The rise of the young affluent class has become the potential consumer base, which is giving the desired impetus to the segment. In today’s time, there is a substantial increase in the pocket size (increased disposable income), inspiring the younger generation to go towards luxury cars.
However, people are always wise enough to exercise extravagance within their budget. Thus, looking at the exorbitant price of new luxury cars, they are switching to pre-owned luxury cars to fulfill their aspirations. The affluent consumers already owning cars in the price range of Rs 35-40 lakhs are upgrading to pre-owned luxury cars.
At the same time, the pre-owned luxury car industry has strengthened its position in the market with the resiliency they have showcased over a period of time. Learning from the volatile market, the segment continuously evolved its services to accommodate the discouraging trends of the market.
Likewise, the emergence of organized players is giving a structural framework to the otherwise scattered segment, and the integrated services with warranty are instilling faith amongst the consumers.
Looking at the current market mix, the pre-owned luxury car players are expecting an uptick in sales this festive season that is going to make up the sector shine.
The author is Co-Founder & MD – Luxury Ride.
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.