BMW India to Enter Used Car Business in India

BMW could soon the soon foray into the lucrative used car business in the Indian auto market. According to the head of the company, a formal announcement could be made during August-September.

The President for BMW India, Andreas Schaaf, said that they are prepared to launch business of used cars for their fleet of BMW cars. They are working on establishing parameters for guarantee, certification, pricing and the car’s age.

BMW’s portfolio in India includes the 5 and 3 Series cars and their X1 SUV in both diesel and petrol versions produced at their plant in Chennai. Other models include the 7 and 6 Series, Z4, X6, X5, X3 and the Gran Turismo that are CBU’s.

BMW’s rival Mercedes Benz also launched their used car business back in May 2010, as Proven Exclusivity. In a span of six months, the company has managed to sell around 600 second units, performing well in the tier III and tier II cities. The price for used Mercedes models began from INR 15 to 16 lakh onwards, depending on age and class of the model.

According to sources from Mercedes, the Indian used car market is projected to account for 10 to 15% of the overall number of premium car sales. According to Schaaf, BMW expects to make huge sales of their second hand models in India’s small and rich towns.

An auto practice leader with PwC, Abdul Majeed, said that the market for used premium cars has a lot of potential in India. Luxury used cars have an important impact on branding, increase visibility in rich Indian towns as well as increase customer base. He said that it would not be long before luxury brands began competing to earn a piece of this rising segment.

BMW currently leads the luxury market in India with a market share of 41%, having sold 17,794 models.

Schaaf also said that they were expanding their reach into tier III and tier II aggressively to expand their dealer outlets to 60 in three and a half year’s time, so that they can continue to hold their No.1 spot in the premium car market. By 2012 end they will increase their dealer outlets from the current 24, to 40, and triple it by 2015 end to 60 dealer outlets. They are seeing a lot of growth in small rich towns that will reduce their dependence on the Mumbai and Delhi markets that contribute 70% to their sales.

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