Pre-owned luxury car market picks up pace, Haryana’s Luxury Ride to expand into metro cities
India’s pre-owned luxury car market, which is estimated at 60,000 units per annum, is a buzzing space in India’s passenger vehicle segment which has witnessed a sharp recovery after the pandemic. The new luxury car market too is seeing strong demand and sales are expected to hit a record high this fiscal.
The rise in demand for both new and used luxury cars can be attributed to the YOLO (You Only Live Once) phenomenon. While a value proposition of a sparingly used or well-kept vehicle is one of the key drivers of growth in the pre-owned car segment, months and even years of wait times in new cars getting delivered to customers, is also enabling a marked growth in the pre-owned vehicle segment in India, which is expected to register 12-14 percent CAGR over the next few years.
The eight-year-old Karnal, Haryana-based Luxury Ride is now looking to aggressively expand into major metros across the country. The company, which opened its first showroom in the national capital in 2015, is now present across four cities including Karnal, Dehradun and Gurugram, and aims to venture into Mumbai and Bengaluru in FY2024.
“When we started operations, we aimed to solve the key problems of lack of trust and transparency in this segment where the average ticket size is in the range of Rs 38-40 lakh. We have a thorough checklist before procuring any car for resale, and we ensure our evaluators adopt a scientific approach,” Sumit Garg, managing director, Luxury Ride, told Autocar Professional.
Luxury Ride procures its inventory directly from users or by leveraging its tie-ups with luxury car showrooms where customers exchange their old cars for brand-new ones.
Ensuring trust and transparency
The company which procures cars in its inventory directly from users, or by leveraging its tie-ups with new car showrooms where customers exchange their old cars for new, tries to liquidate 70-75% of its inventory every month, with half of the sales coming from customers directly walking into its outlets.
“Look and feel is extremely critical when the ticket size is higher. While we have cars listed online, and are in the process of rolling out a mobile app as well to create an omni-channel format, almost 50 percent of the transactions happen when the customers see the car in person,” Garg added.
Luxury Ride’s company-owned retail outlets vary in their size depending upon the city, and its flagship Karnal showroom is spread over a one-acre site, with four storeys housing 150 cars. The Gurugram showroom, which measures 8,000 square feet, displays 10 cars.
While Luxury Ride has adopted technology such as CRM and ERP systems to strengthen its back-end operations as it evolved from an unorganised to an organised player, it now anticipates the upcoming tighter compliance regulations that are set to kick in from April 1, 2023, for used-car dealers, to be in favour of organised players and set them at an advantage. The company is set to close FY2023 by retailing close to 200 cars from its four physical outlets, and targets doubling of sales to up to 450 units by end-FY2024.
On-demand service
Other than procuring and selling pre-owned luxury cars, also Luxury Ride has a core focus on offering aftersales and related services (insurance, loans, car care) to owners of high-end, premium cars in India. The company’s Delhi showroom, which is spread over 25,000 square feet, is a 3S facility and other than the used cars for sale on display, it also houses a fully-integrated servicing workshop which can cater to preventive maintenance as well as repair jobs for high-end cars of not just Luxury Ride, but other customers as well.
“We have heavily invested in state-of-the-art equipment as well as trained manpower, with technicians who can specifically cater to the needs of high-end cars. There is a heightened demand in the aftersales area as owners do not have a reliable, trustworthy alternative to authorised workshops for out-of-warranty premium cars. We are seeing good RoI in this vertical of the business, which has been carved out as a separate entity to ease future expansion and growth,” remarked Garg.
With a vision to scale and evolve into a major player within the luxury used-car segment in India, Luxury Ride is working towards executing its plan of penetrating major metros in the country. While it has not initiated any round of fundraising, it says it will need to raise capital through equity and debt to fulfil its expansion goals, but in due course of time.
He concluded by saying, “We want to have a big setup wherein we can house more cars under one roof, than having smaller outlets with a lesser number of cars. We will be majorly targeting metros in the first phase as we can eye good growth due to people’s aspirations and willingness to spend extra for a transparent transaction.”
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