Witnessing the growth of the pre-owned car segment in India, Mercedes Benz India has announced its plans to launch its pre-owned car business in India. The other players in the pre-owned car segment include Maruti Suzuki, Volkswagen, Hyundai, Ford, Toyota and Mahindra. Recently, Renault had also declared its intentions to venture in this business segment. This year, Mercedes Benz, too has recorded a growth of 45% in the used cars segment.
Mercedes Benz that is a key player in the luxury car segment will join BMW to sell its used cars through its authorized dealers. BMW India that had launched its BMW Premium Selection in November 2011 has got exclusive dealerships across key locations in India.
“In two weeks’ time, 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,” an Economic Times report quoted Mercedes-Benz India, MD & CEO Eberhard Kern, as saying.
Kern also said that the pre-owned car segment is the next growth story in the luxury car segment in India. The company plans to carry out its pre-owned car business with its existing dealers. This will ensure the customers a very effective trading price. In order to increase product portfolios and introduce latest technology to the Indian market, Mercedes Benz India would be focusing on both metro and non-metro cities for the sale of premium cars.
According to Kern, three-fourth of company’s business comes from leasing and financing and the rest comes from cash. The company will also focus on tier II and tier-III cities. Mercedes Benz gets 45% of total volume from metros (Delhi and Mumbai) and the rest comes from non-metros. In October, 2011, Mercedes-Benz started its car leasing business, named ‘Star Lease’ in India. Through Star Lease, the company leases its wide range of cars. Under the scheme, the customers who had leased a car will have the option to buy the same after three years.
Currently, Mercedes-Benz has 68 dealerships in 37 cities. The company had opened 13 new outlets this year and the 14th one will be inaugurated in Madurai soon. Last month, Mercedes-Benz had launched the Mercedes-Benz C Class at a price of Rs. 40.9 lakhs (ex-showroom, Delhi). The luxury car maker is expected to surpass its sales by 10,000 units. While the M-Class is showing vast growth of 100% in India, the E-Class is the best selling model of the company.
With so many established brands already existing in this segment, the entrance of Mercedes Benz into this segment is expected to further enhance the growth of the pre-owned car segment in India. With used cars having improved and longer life due to technological up gradation, the growth of the pre-owned car segment seems to be positive. The after sales service assured by most of the car brands ensures that most of the second hand cars are in good condition making it lucrative for second hand buyers.
With the growing number of organized players in this segment, the pre-owned car market has improved with more credibility and transparency, fairer deals and warranties, better retail network and easy availability of finances.
With the organized sector playing a very important role, the used car market is likely to grow in a big way in the coming years.