While the global shortage of semiconductors has been playing spoilsport when it comes to new car sales, for luxury carmakers, this dark cloud situation does seem to come with a silver lining, mainly with regards to their used car business.
The global semiconductor shortage has inadvertently provided an immense boost to the pre-owned car market
The impact of the global shortage of semiconductors has been quite massive. Automakers in India, and across the world have been facing major setbacks due to production losses and declining sales, and the luxury segment is no exception. However, for luxury carmakers, this dark cloud situation does seem to come with a silver lining, mainly with regards to their used car business. In a recent interview with Business Standard, BMW Group India CEO, Vikram Pawah said that the global semiconductor shortage has inadvertently provided an immense boost to the pre-owned car market, as the brand is experiencing high additional demand.
Talking about the pre-owned car business, Pawah said, “BMW cars consistently command good resale value in the pre-owned car market. With the current situation, we are experiencing high additional demand, which is reflecting in the market prices as well. The prices at which customers are willing to secure a pre-owned BMW has increased.” The India head of the Bavarian carmakers further added that since the launch of its pre-owned car business – BMW Premium Selection – in 2012, the company has seen an over 200 per cent growth in used car sales.
Also Read: Buying A Used Luxury Car: Pros And Cons
To see how the competition is doing, we did reach out to other leading players of the industry, like Mercedes-Benz India and Audi India as well. However, we are still awaiting a response from the other two German carmakers, and at the time of publishing this story, our emails remained unanswered.
To get a better grasp of the current situation of the overall premium used car space, we even got in touch with multi-branded luxury used car sellers like Big Boy Toyz. Sharing similar views as Pawah, Jatin Ahuja, Founder & CEO, Big Boy Toyz said, “Considering the long waiting period of new cars, there has been a shift in demand from new cars to pre-used cars. Customers are opting more for pre-used cars, increasing sales of these cars” He further added, “The demand for the newer models, mostly the cars which are one- or two-year-old has increased during this time.”
The COVID-19 has in a way helped the used car business in India, especially the pre-owned luxury car segment. Soon after the first wave of the coronavirus pandemic, industry experts and leading players have already said that the pre-owned luxury car segment will play a pivotal role in the post-covid era. Especially the organised pre-owned car business, which has some inherent advantages that attract the buyers like certified vehicles and warranty plans, similar to new cars.
BMW Quote Source: Business Standard