As the festive fervor is setting the mood, the pre-owned luxury car industry is highly expectant this festive season. The automobile industry has faced a decline in the overall sales figure due to the economic slowdown. Moreover, the surge in the price of steel material, supply chain disruptions, semiconductor shortages, and other such factors have hammered the supply capacity of the industry. It has widened the supply and demand gap, one of the major reasons behind the soaring prices of new vehicles. In light of these discouraging trends, the pre-owned industry players are highly optimistic about registering revived sales in the upcoming festive season.
The festive season is the time when consumers are very high on their sentiments. It is considered an auspicious time for purchasing new things to match the spirit of celebration. And buying an expensive asset like a car is deemed very fortunate, especially during the occasion of ‘dhanteras’ buying metallic things is considered to be very lucky.
But the new car market is reeling under the woes of semiconductor shortage and other global challenges which together are highly impacting the demand for new cars. Owing to the various factors, the gap between the demand and supply is widening resulting in long waiting periods. This is discouraging enough for the consumers to look for other available alternatives to not ruin their festive spirit. With the pre-owned luxury car market recording a 15 percent CAGR growth in the first half of 2022, there has been a great buzz around the segment in recent years. Where the first quarter witnessed a sharp rise in the demand for pre-owned luxury cars, the industry maintained a balance between the demand and supply of the cars. It was a major factor in meeting customer satisfaction.
The mismatch in the supply and demand of new cars is leading to exorbitant commodity costs which is rendering OEMs incapable of offering discounts on most of the models. The trend is expected to prevail even during the festive period. Therefore, the sector will not just be plagued by the shortage in the supply of new cars but will also impose a price hike. With pre-owned cars emerging as a potential segment in the automobile industry, consumers are not shying away from exploring the sector.
It can be said that rising luxury consumers are the major contributors to driving this demand for luxury cars. The young affluent consumers are at the forefront of leading the change in consumer behavior. Coming with the backup of increased discretionary income there is a noticeable evolution in their aspirations to upgrade to a luxury car. But considering the skyrocketing price of the new luxury car, those with the bandwidth of Rs 35-40 price range are happily opting for pre-owned luxury cars.
Consumer discontentment with the new car will be the driving force behind the surging demand for pre-owned luxury cars in the upcoming festive season. Though the overall industry went through an all-time low during the past few years, learning from the volatile market, the segment has only become resilient with time showing gradual signs of revival over the period. Moreover, the emerging organized players in the pre-owned industry are leaving no stone unturned to give proper structure to the pre-owned luxury car industry. The integrated services offered by them have been widely instilling faith amongst potential customers who previously were skeptical about purchasing pre-owned cars.
Looking at the trend, the luxury pre-owned car players are highly hopeful of benefitting during the festive season and meeting the expectations missed in the past few years.