Boom in Luxury Used Car Market After Lockdown | AU Small Finance Bank
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Top Trend : Mercedes-Benz Sees Boom in Luxury Used Car Market After Lockdown

    The pre-owned luxury car market in India has seen an increase in prices due to lower inventories and overall prices of new cars going up considerably.
     
    Thanks to Covid-19 and the resultant need for personal mobility, the demand for used vehicles has seen an increase of late. However, this demand isn’t just limited to lower segments only. Luxury car market leader Mercedes-Benz India says that it has seen an uptick in demand for its used vehicles too.
     
    On the side-lines of the launch of the new Mercedes-AMG GLE 53 4MATIC+ Coupe in October 2020, Santosh Iyer, Vice-President, Sales and Marketing, Mercedes-Benz India said, “We have an online platform where these (used) cars are listed. Our average time to sell a used car has come down, price realisation has gone up for dealers, the used car prices are firming up.”
     
    Additionally, the prices for new cars have also increased in recent times due to the exchange rate of the rupee versus the euro going up nearly 15 percent in the last year alone. Iyer thinks this an additional factor. “When the prices of new cars go up, the used car prices follow. So, I think that’s why the used car prices will go up,” added Iyer.
     
    Other factors are also at play including limited supply of new cars from luxury automakers due to reduced production during the lockdown. Also, a considerable increase in prices due to BS VI regulations and the lack of general inventory in the used car segment with owners now holding on to their cars a little longer to avoid a major purchase decision.
     
    The increase in prices of used luxury cars has not gone up across the board though, but has affected only a certain range or size of cars. Segments that have seen their prices increase are the entry-level luxury sedan or SUV segment (like the Mercedes-Benz CLA/GLA) and the well-established midsize sedans and SUVs (Mercedes-Benz C-Class/E-Class/GLC/GLE).
     
    Values of luxury hatchbacks (A-Class) on one side of the luxury car spectrum and full-size sedans like the S-Class, on the other end, seem to still be around the same pre-Covid levels. Similarly, the increase in prices is only apparent on cars that are not more than four or five years old. Older luxury cars, especially a generation (or two) older than what is currently available and those without any manufacturer warranty have seen a drop in prices.
     
    According to industry veterans, the used car market could continue to see growth in the luxury car sector as well.