Residual values and total cost of ownership are becoming an important parameter for customers in the luxury car segment, said the latest report released by the IndianBlueBook, the pricing and analytics platform for new and pre-owned vehicles in India.
The study titled “Residual Value Analysis of Luxury Car Segment” throws light on the Indian luxury car segment . The IndianBlueBook report said three brands, Mercedes-Benz, Audi and BMW are dominating more than 90 percent of the luxury car market in India.
Residuals of premium brands indicate a 50 percent depreciation in three years, making them extremely popular in the pre-owned car segment.
The Report 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 online properties including but not limited to Indian Blue Book and eDiig 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 report noted that the total cost of ownership of a luxury car is expected to be over 60 percent of the on-road car price over a 3-year ownership period. BMW vehicles, interestingly, command a premium in price over Audi and Mercedes
Mercedes’ service costs are, however, 24 percent and 29 percent lower compared to Audi and BMW respectively. The online searches for luxury car brands account for around 7 percent of total car searches compared to the 1 percent share of sales they represent.
Luxury cars are becoming popular in the pre-owned car segment with Certification playing an important driver of this growth.
Leasing with buyback guarantees is expected to increase the growth of the luxury car segment in the coming years, as these guarantees provide “peace of mind” to the consumers.
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.