Residual Values and Total Cost of Ownership important parameters for Luxury Car Buyers
Indianbluebook releases Insights on residual values of major brands in the Luxury car segment
- 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
November 24, 2016, Mumbai: 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.
The IndianBlueBook (IBB) URL: www.indianbluebook.com, is the industry first pricing guide for new and pre-owned vehicle valuation in India. With exclusive access to a large number of car transactions that take place every day through different channels, IBB derives scientific and insightful inferences that lead to vehicle price discovery. Whether you're buying or selling a vehicle, IBB helps you discover its real worth. Through various transactions on different customer-facing and B2B channels, IBB's analytical engine logically deduces a pricing index which is then used to derive the benchmark market price of any vehicle. In essence,
IBB is a one-of-a-kind valuation platform based on rigorous research and pure rationality. It is driven by the sheer passion to demystify the data points of a million transactions, thus ensuring that you never overpay or never undersell. IBB offers a wide array of tools such as Total Cost of Ownership (TCO) and residual value analysis, regularly updated reviews and insights via its blog, and a platform that enables its customers to buy and sell vehicles, thereby serving as a one-stop shop for customers looking to research vehicles.
About Mahindra First Choice Wheels
Mahindra First Choice Wheels is a dominant player in the Indian used vehicle eco system providing products and services to cater to the needs of retail and wholesale customers utilizing its "on-the-ground" and "in-the-cloud" capabilities.
The company's business model is based on 4 key building blocks:
Vehicle retail - Under the "Mahindra First Choice" brand name the company has created a unique franchisee driven business model and is on a mission to transform the way used cars are retailed in the country. The company has a network of 1000 plus outlets spread across 339 locations in the country which includes metros, mini metros and smaller towns. The cumulative retail footprint under the Mahindra First Choice brand is over a million sq feet. (www.mahindrafirstchoice.com)
Vehicle auctions - The company is the market leader in the online auction space, having sold in excess of 3 lakh vehicles through the 'eDiig' auction platform (www.ediig.in) eDiig is a classic wholesale marketplace where multiple sellers and buyers compete in a transparent online environment. With over 20,000 registered buyers and sellers, eDiig aims to leverage its 'True time bids' solution, to seamlessly bridge the requirements of offline and online participants, thus enabling transparency and superior vehicle price discovery. eDiig Auctions take place across 1000 locations in India and over 60000 vehicles were sold through its platform in FY 16. With its mobile auction application eDiig Now, the company will provide buyers on-the-go auction and bidding services. The company has extended its auction solution to vehicle yards through the Yard Management System (YMS), a one-of-a-kind mobile application that supports auction clients with their vehicle life cycle management processes. All these have made eDiig, India's most trusted Automobile Exchange Platform.
Vehicle inspections – Autoinspekt is a comprehensive used vehicle inspection and valuation service for lenders, dealers, OEMs and consumers. By combining the use of technology and assurance of physical inspection, Autoinspekt has built capabilities to service inspection and valuation needs across categories and purposes. (www.autoinspekt.com)
Vehicle pricing - Access to used car transactions data across retail and wholesale channels gave the company an opportunity to develop the IndianBlueBook.com, which is also referred to as IBB. Having started out as a used car pricing widget, Indianbluebook.com has transformed into a full-fledged online research platform for customers to buy and sell their car. (www.indianbluebook.com)
General Manager, Group Communications
Mahindra and Mahindra Ltd.
Mobile: +91 9769212078
For further information on the Report contact:email@example.com
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