Used luxury cars get attractive pricing

Want a Mercedes Benz that’s at least 40 per cent cheaper?

Why not go for a used car from the company’s own outlet.

With a growing number of young people wishing to upgrade to luxury cars, most automakers are opening their own company outlets to market used or pre-owned cars.

“Who wouldn’t want a C-Class that’s about 40-50 per cent cheaper?” asked Mr Peter T. Honegg, MD of Mercedes Benz India.

The auto major, which opened its pre-owned car business under the brand of Proven Exclusivity last year, is already seeing a good response.

“This business makes senses for us in pushing the new models to existing customers and in attracting the young crowd into the family,” added Mr Honegg.

Close on the heels are other luxury carmakers such as BMW and Audi. While BMW has announced its plans to open its pre-owned outlet by October 2011, Audi intends to do so sometime early next year.

But why would the companies themselves want to promote used cars? The pre-owned car business is important to manufacturers to keep the resale value of their cars high, explained Mr Kumar Kandaswami, leader manufacturing, Deloitte India.

“This determines how much discount can be made on their new cars,” he added.

The strategy is mainly aimed at targeting brand conscious but not necessarily the rich.

“There are people who wouldn’t mind driving a used luxury car,” Mr Kumar said.

Also, the used luxury cars have come as a boon for small hotels and tour operators.

“While they may not be using the car for long routes but they can find it a viable option for intra-city transport,” added Mr Kumar.

Mr Ravi Khanna, manager of Khanna Tours and Travels said, “While we cannot go in for a new luxury car, a used car has the twin advantage of boosting our image and saving costs.”