Future of India?s Premium Pre-Owned Car Market: Ken ResearchPosted by kenresearch on March 25th, 2019 Jatin Ahuja, the Founder and Managing Director of Big Boy Toyz, articulates the fact to Anish Malhotra, Market Research Associate at Ken Research Private Limited that pre-owned Mercedes Benz tops the chart with a fair margin when it comes to volume sales. This is followed by brands such as BMW and Audi, which experience cut throat competition. Other brands in the market such as Jaguar & Land Rover and Volvo are steadily increasing their penetration into market in terms of sales. Question: What was the idea behind the inception of BBT? What kind of growth has the company witnessed since its inception? What future strategies does BBT have in the coming 5 years? Jatin Ahuja- Big Boy Toyz is a one stop destination for pre-owned and new exotic cars under one roof. Passion and liking for cars since my childhood days along with the intent to do something overtly different with it, is essentially the root cause of where you see us today. Having started to work at the age of seventeen was the big differentiating factor that enabled me to gain the extra experiential edge and wisdom in the pursuit towards the business acumen required for cars. We came up with Magus Cars Ltd in the year 2007 which was into importing high end luxury cars into India. The concept was new because some of the models like Porsche Panamera and BMW X6 made their arrival on our shores even before their official launch. The practice gained traction and soon with a wide network of customers willing to sell their four wheel possessions and upgrading to a new one, Big Boy Toyz came into existence in the year 2009. Housing 24 exotic brands such as Aston Martin, Rolls Royce, Bentley, Ferrari, Lamborghini, Maserati etc., BBT has close to 100 cars in its inventory at any given point of time spread across its three locations at Gurgaon, New Delhi and Mumbai. All our customers have a 100% satisfaction rate and we look to draw immense motivation from it. For the near future, BBT looks to have an expansive inventory of cars. Our entry into the new car segment has brought us extra sales. This was a well-articulated strategy on our part. Having set up a base in Mumbai, the next in line are the cities of Hyderabad and Bangalore. Question: Which specific reasons have led to the growth of India’s Premium Pre-Owned Car market and what kind of growth has the market observed over the previous five years? Jatin Ahuja- Since 2013, India’s premium pre-owned car market has witnessed a double digit growth rate and at present one can witness the increase in sales units reaching to new level. Major factors which has led to the premium pre-owned car market of India to reach a mature stage are the Rising Disposable Income, greater Product Acceptability, better transparent mechanisms, easy access to finance because of total financial inclusion initiatives taken by banks, nonbanks and captive financers and Influx of western trends. Question: What do you think is the current market shares (in terms of Percentage) of Organized and Unorganized/Semi Organized Market in terms of total volume sales of major premium pre-owned brands such as Audi, BMW, Mercedes Benz, JLR, Volvo and several others? Jatin Ahuja- As of 2018, the organized channel is supplying the Indian premium pre-owned car market with 20-25% of the volumes. On the other hand, the volumes of used premium cars in circulation with the unorganized/semi-organized and C2C market is in the range of 75-80%. However, as per the current market trend, more unorganized dealers are upgrading themselves in terms of robust aftersales service and in house certification programs to meet the standards of organized channel, which is very crucial to attract more customers. Having a genuine mechanism of assurance in terms of product quality qualifies to be the underlying basis for the pull factor. Question: As per the current industry trend, what must be the split between the sales in Organized and Unorganized market via direct dealership Walk-ins Vs Online channel. Furthermore, which all 3rd party portals or online auto portals are mostly used by dealers in India? Jatin Ahuja- Lately, it has been observed that both organized and Unorganized market have heavy dependence on the online channels for successful sale conversion of premium pre-owned cars with a lion’s share in the range of 81-85%. Almost every customer in search of a premium used car approaches the classified pages or online auto portals making it the very first point of contact. On the other hand, there are very few customers who directly walk-in the dealership to inquire/ purchase a used premium car. The Organized/ Semi Organized players have their own online portals, mobile applications to market their fleet of vehicles, however the Unorganized dealers resort to classified pages/ 3rd party auto portals such as CarDekho.com, Carwale.com, Cars24, OLX and even Facebook pages/WhatsApp groups. Question: What is the general customer journey when it comes to purchase of premium used cars from organized and unorganized channels in India? Also enlighten us on how does each process create a distinction for the customer? Jatin Ahuja- Buying the best value for money product from a trustworthy source has always been at the back of the mind of the customer as and when they explore certain organized/ Unorganized dealers for their next purchase. Next comes the process where the buyer shortlists the available participants in the market. One thing which is very important here is to have a presence. Somehow or the other, your brand has to be highlighted before the prospective individuals and this is accomplished via a strong social media platform followed by outdoor advertising & events and to some extent even words of praise. It does add up to the recalling effect. Having a professional touch to the website gives you a distinct advantage because the ease of browsing makes the customers aware of who you are and what you do. The very fact that a potential buyer engages with you on an “online call to action” button signifies that the basics are correct and things are on track. Relying immensely on a one to one informal relationship with the buyers has played a key success role for the unorganized channel. And since times are changing, they too are seeing a definite improvisation in ensuring an exemplary buying and ownership experience. Question: What is the certification process followed by Big Boy Toyz, being a semi Organized player? Also, how is the certification process offered by BBT different from that of other organized players such as Audi Approved Plus, Mercedes Benz Certified, Jaguar Land Rover Approved and BMW Premium Selection in the premium used car market of India? Jatin Ahuja- The organized players have truly raised the bar and set an example for India’s pre owned used car industry owing to their stringent checkpoints list. Since a used car is in question, getting the basics right in terms of a comprehensive verification makes all the difference. As mentioned earlier, Big Boy Toyz looks out for niche and rare exotic cars which have a clean history and have clocked less than 25000 km. Our 151 checkpoints are like a rigorous test which decides our future course of action related to procurement. Once passed, the experts then proceed to prepare the certification for the particular model. This being a mandatory process because BBT strives for quality always. Question-After reaching out to both Organized and Unorganized players, we have observed that the sourcing of premium used cars varies in terms of trade-ins and buy sell/park sell concept.Dealership walk-ins and association with unorganized dealers helps the organized dealers to source vehicles. As per your understanding of the market, is there any other sourcing mode for organized players and how does it get distinguished with unorganized players? Jatin Ahuja- The sourcing process for the organized players goes through a predefined evaluation process where even the seller (customer) is guaranteed of a satisfactory and adequate return. BBT’s modus operandi is to pick cars from the best and trustable sources across India. Many of them include our customers too. We do get many walk-ins also on a daily basis wanting to get the best quote for their cars. At times, due to a specific need and demand for a particular make and model of a car from a client, the sourcing team at Big Boy Toyz searches for appropriate references from the customers’ database to complete the task within the stipulated time. For the new cars, BBT does bulk sourcing directly from the company to get a competitive price advantage. As far as the unorganized domain is concerned, the shift towards ensuring a reliable procurement methodology has seen light in recent times which has definitely raised the bar in their forte. Question: What kind of competition did India’s certified premium pre-owned car market observe in the previous decade? Jatin Ahuja- It’s the trust which people have on a Mercedes Benz. So be it even a pre-owned three pointed star from the authorized franchisee outlets, customers are willing to go in for the purchase.So that is why it tops the chart by a fair margin. BMW and Audi have a cut throat competition amongst themselves while Jaguar/Land Rover and Volvo are steadily entering into the frame in terms of sales. The market is at very young stage and is slowly moving towards a mature phase as more and more dealers are entering the market, thereby signifying immense potential for the Pre-Owned: New premium car ratio to surge to 1.5 times in medium run. To find more Used Car Market Research Reports, refer to this link:- https://www.kenresearch.com/automotive-transportation-and-warehousing/100/All.html Contact Us:- Like it? Share it! More by this author |