The luxury car market in India has been experiencing significant growth over the past couple of years. In 2023, the luxury car segment in India grew by around 20% with the highest-ever sales of around 47,000 cars in a calendar year, showcasing a robust demand despite global economic uncertainties. This evolution is driven by a combination of increasing disposable incomes, rising number of millionaires, and the aspirational value associated with luxury brands. In 2024, the market is expected to cross 50,000-unit sales. This seems quite possible if we look at the Jan-24-Mar-24 quarterly sales of the segment which is estimated to have grown at 14% Y-o-Y basis. However, the penetration of luxury cars in India remains very low at 1% compared to other emerging economies like Brazil, Thailand, and Indonesia where luxury car penetration ranges from 5% to 8%. The lower penetration could also signal a future boom in demand for luxury cars in India.
What is more interesting is how the used luxury car market is evolving in India. The market size for used luxury cars in India is expected to have crossed 60,000 units in 2023, and it is projected to grow at a double-digit CAGR over the next few years. No need to say, the growth in new car sales is bound to further boost the used luxury car market in coming years. So what is driving the sales of used luxury cars? Let’s delve into the top reasons we find are driving the growth of the segment.
Key Factors Driving the Growth of Used Luxury Cars in India
Affordability: It is quite ironic to use the word ‘Affordability’ while talking about luxury cars, but this is one of the primary factors driving the growth of the used luxury car market. Luxury cars depreciate faster than regular cars, making high-end models available at significantly lower prices in the used car market. This allows a broader range of consumers to access these vehicles.
Value for Money: Used luxury cars offer excellent value for money, as buyers can get a top-tier vehicle with advanced features and superior performance at a fraction of the original price. This makes them an attractive option for value-conscious consumers who desire luxury without the hefty price tag.
Increasing Trust in Pre-Owned Vehicles: The growing network of certified pre-owned programs by luxury car manufacturers has enhanced consumer trust in the quality and reliability of used luxury cars. These programs offer rigorous inspection processes, warranties, and after-sales services, ensuring peace of mind for buyers. Audi India sold 3449 pre-owned cars through its Audi Approved Plus showrooms, recording a 62% growth in 2023. Mercedes-Benz India reported 20% growth in the first six months of 2023. A similar trend is seen in the organized multi-brand dealerships that have started offering warranties and allied services on their used luxury cars.
Consumer Behavior: The aspirational nature of Indian consumers, coupled with the increasing influence of social media and lifestyle trends, has led to a higher demand for luxury cars. Owning a luxury vehicle is often seen as a status symbol, and the used car market provides an accessible entry point.
Technological Advancements: The integration of technology in the sales process, including online platforms and digital showrooms, has made it easier for consumers to explore and purchase used luxury cars. This convenience has significantly contributed to market growth.
Allied service offering: Used car financing, warranties, certification, RSA, etc. have made buying a used luxury car very similar to buying a new car. These services go a long way in building trust and making buying a used luxury car affordable (financing).
Future Predictions for the Used Luxury Car Market in India
The future of the used luxury car market in India looks promising. With continuous economic growth and increasing urbanization, the demand for luxury vehicles is expected to rise. The market is anticipated to grow at a CAGR of around 12-14% over the next five years. Several trends are likely to shape this growth:
Expansion of Digital Platforms: The rise of digital platforms and online marketplaces will continue to streamline the buying and selling process, making it more accessible and efficient for consumers. Motozite is one such digital platform catering exclusively to luxury car buyers and sellers.
Enhanced Customer Experience: Luxury car manufacturers and dealerships are expected to invest more in providing personalized and premium customer experiences, further boosting consumer confidence in the used car market. This is evident from the growing strength of pre-owned car showrooms of the OEMs e.g. Audi Approved Plus.
Sustainability and Electric Vehicles: With the global shift towards sustainability, the demand for used luxury electric vehicles (EVs) is expected to grow. As more luxury brands introduce electric models, the pre-owned market will also see an increase in the availability of these eco-friendly vehicles.
Conclusion
The used luxury car market in India is on a growth trajectory, driven by affordability, value for money, increased consumer trust, and evolving consumer behavior. At Motozite, we are proud to be a part of this dynamic industry. Our platform offers a seamless and trustworthy experience for customers looking to buy used or demo luxury cars. With a wide range of pre-owned vehicles and exceptional customer service, Motozite is your one-stop destination for luxury cars in India.