- The Indian luxury car segment is still in its nascent stage with 3 brands dominating over 90% of the market
- Residual value analysis of luxury car brands indicates a 50% depreciation in 3 years as compared to other segments
- Luxury cars are extremely popular in the pre-owned car segment and their Certification is an important driver of this segment’s growth
- Total cost of Ownership (TCO) of a luxury car is expected to be over 60% of the on-road car price over a 3-year ownership period.
- Demonetisation of high value currency is expected to have an adverse short term impact on the sales of both new and pre-owned luxury cars
IndianBlueBook (IBB) www.indianbluebook.com, the industry first pricing and analytics platform for new and pre-owned vehicles in India, today released its study “Residual Value Analysis of Luxury Car Segment”. The Report throws light on this nascent but growing segment of the Indian car market.
- Three brands, Mercedes, Audi and BMW, dominate over 90% of the luxury car market in India.
- Residual Values and Total Cost of Ownership are becoming an important parameter for customers in the luxury car segment.
- An analysis of the popular models through the lens of residuals revealed:
- Residuals of premium brands indicate a 50% depreciation in 3 years, making them extremely popular in the pre-owned car segment
- Total cost of Ownership of a luxury car is expected to be over 60% of the on-road car price over a 3-year ownership period.
- Normalizing on-road pricing for major content, BMW vehicles command a premium in price over Audi and Mercedes
- Mercedes’ service costs are 24% and 29% lower compared to Audi and BMW respectively
- Online searches for luxury car brands account for close to 7% of total car searches compared to the 1% share of sales they represent, which implies luxury brands have a high aspirational element for the Indian consumer.
- Luxury cars are popular in the pre-owned car segment with Certification, emerging as an important driver of this growth.
- Leasing with buyback guarantees is expected to propel the growth of the luxury car segment (albeit from a small base) in the coming years, as these guarantees provide “peace of mind” to the consumer.
- Demonetisation of high value currency is expected to have adverse short term impact both on the sales of luxury new cars and pre-owned cars
The Report is part of a series of insights from the IndianBlueBook. It leverages insights from India’s largest multibrand used car footprint “on the ground” via the Mahindra First Choice Wheels Ltd’s franchise network and significant presence “in the cloud” with a suite of industry leading online properties including but not limited to Indian Blue Book (www.indianbluebook.com) and eDiig (www.eDiig.com) platforms. Indianbluebook.com has access to thousands of used car transactions every month across retail and wholesale channels. The company mines this data on a continuous basis to provide customers information that would enable them to make prudent car buying and selling decisions.
Please click below link to view the entire report: