German luxury carmaker Mercedes-Benz expects its used cars business in India to stay robust even as the COVID-19 crisis continues to impact the overall dynamics of the automotive market, a top company official said.
The automaker, however, does not see the segment growing at the cost of its new car sales, where it expects some kind of revival happening in the festive season this year.
“Young and first-time buyers who aspire to own a three-pointed star usually opt for certified pre-owned cars to experience the product before moving on to a new one. So whilst we expect pre-owned cars sales to increase, we don’t expect that this will come as a substitute to new cars,” Mercedes-Benz India MD and CEO Martin Schwenk said in a media interaction.
The pre-owned car business has been a strong area of growth for the company with it having completed more than nine years in the market, he added.
The product, service, financial offerings and brand experience for the pre-owned cars are similar to a brand new car, and that has been one of the major contributing factors for the popularity of the segment, Schwenk said.
The company is also witnessing strong interest for pre-owned cars on its online sales platform, he noted.
Mercedes-Benz Certified has sold over 20,500 units of pre-owned cars over the last five years and witnessed 20 per cent cumulative growth, Schwenk said.
Commenting on overall market conditions, he said 2020 has already turned out to be a challenging year for the company.
“Our sales has been affected due to the ongoing macro-economic headwinds, COVID-related challenges and unavailability of volume models in first and second quarters,” Schwenk said.
Asked if the company could match up to its sales performance in 2019, when it sold 13,786 units, he said, “It will be a very difficult task from here onwards to compensate the loss of a quarter.” The company expects demand returning only by the festive season, he added.
With customers hesitating to go to a showroom to buy a car, online sales have become an important sales tool for the auto companies.
“Online sales is picking up gradually and we will continue with our online sales strategy. We have been able to successfully create a niche for our online sales platform in India and the customer response is encouraging. We already have 100 plus bookings,” Schwenk said.
Online sales will complement brick-and-mortar sales and the company expects both together will increase the productivity and efficiency of the dealerships, he added.