Luxury car manufacturers are now betting heavily on the future of smaller towns. Companies like BMW, Mercedes-Benz, and Audi see great potential in rapidly growing Tier II and Tier III Cities. Pre-owned cars and the number of dealerships in smaller towns play an important role in the penetration rate of luxury vehicles.
Audi India’s business of pre-owned vehicles saw the highest-ever quarterly sales growth with a 50 percent increase. We have over 300 cars on the Audi Approved Plus portal in the entire country. The market for used cars has grown in the last two to three years, particularly in Tier-II cities and Tier-III. Audi India’s Audi Approved Plus (pre-owned car) business has increased from seven facilities in 2021 to 23 currently to meet the demand.
BMW Premium Selection is a key component of the company’s success. It is India’s first structured pre-owned car business, and its exclusivity characterizes it. BMW Premium Selection in India has given a major boost to BMW’s operations and introduced many new customers, particularly from non-metros, to the BMW brand. Customers can experience the quality of the vehicle, the customer service, and the sales process by purchasing a used car. Customers who plan to buy a new vehicle in the near future should consider this factor when making their decision. BMW Premium Selection is a great way to introduce many customers from the near-premium segment into the world of luxury. Vikram PAwah, President and CEO of BMW Group India, said that BMW Premium Selection had given a boost to BMW operations in India and introduced new customers to BMW, particularly from non-metros.
Lance Bennett, sales and Marketing, Mercedes-Benz India, shared a similar view. “Mercedes-Benz Certified and Mercedes-Benz Marketplace, as well as the newly launched online pre-owned car store, enable customers to choose a Mercedes-Benz of their choice among the range of available pre-owned Mercedes-Benz vehicles. These programs are flexible and trusted, which has led to a significant increase in sales for mini metros.
Tier II and Tier III Cities dominate Lexus India’s pre-owned luxury vehicle sales. They account for almost 40% of the company’s total sales. This upward trend coincides with customers becoming interested in the new price ranges for luxury car brands. The market has grown simultaneously, said Naveen Soni, the president of Lexus India.
Dealership Stores
India is now getting dealerships that meet international standards. BMW Group India wants to expand the Indian luxury vehicle market by partnering with strong dealers. Pawah, BMW Group India CEO, said: “We have taken a definite course and established over 80 touchpoints across 35 cities in the country. We remain customer-centric and set very high standards in service quality and care.”
Mercedes-Benz has over 123 contact points in 45 cities. Mercedes-Benz introduced the Retail of the Future model (ROTF) in 2021, which is a ‘Direct-to-Customer’ sales channel. Mercedes-Benz India’s new business model, ROTF, allows it to set prices and provide inventory and invoices directly to customers. Customers get a price guarantee and a smooth purchase process. They also receive complete transparency, the best possible customer experience, and utter transparency. This is a multi-channel model that spans both the traditional and digital retail formats, thus building a focus on e-commerce. Customers can complete the booking process at home,” said Bennett of Mercedes-Benz India.
Lexus India is a well-established brand in India with 23 touchpoints located across 16 cities. Over the past year, eight Lexus service centers have been added. Soni, President of Lexus India, said that we are opening smaller brand spaces called Meraki.
Lexus covered 56 percent of the market with seven major cities at the start of last year. In addition to the eight service centers, Meraki has opened one in Coimbatore, one in Gurgaon, and another in Pune. By the end of this year, we plan to have a market share of 85-86 percent. We have also launched Lexus Virtual Dome, an online touchpoint that allows our guests to experience Lexus virtually. We plan to open up more service points to reach around 90% of the luxury vehicle market wherever Lexus is located.
