Q3 and Q5 dominate Audi used model sales, company expects momentum to continue
The used vehicle market has been on the rise in recent years, partly due to the preference for personal mobility in the time of Covid-19 and also due to the need to control personal finances. The used luxury car space therefore also made the most of the growing opportunities and Audi India was well placed to strike on the front foot.
In an interview with HT Auto, Audi India Head, Balbir Singh Dhillon discusses how the luxury used car space has grown over the years and elaborates on the vision and operation of the own used car channel from Audi – Audi Approved: more.
Here is an excerpt from the interaction with Dhillon:
Q: How has the used luxury car market evolved during the pandemic?
A: The used car market in India has grown immensely over the last couple of years. In the mass car segment, it is more about opting for personal mobility rather than public transport. When you go higher, towards the luxury car segment, the emotions are different. Customers who want to enter the luxury space without having to spend on a new car find it easier to do so through the used car channel.
For Audi India, we have experienced significant growth over the past two to three years. In 2021 we saw 39% growth and in the first quarter of 2022 we saw 50% growth; this will only continue as we move forward.
Q: How do rising vehicle prices and long lead times (parts shortages) affect demand for used Audi vehicles?
A: There has been a lot of pent-up demand since the pandemic, due to semiconductor shortages and, more recently, supply constraints. This demand could not be fully met and resulted in waiting periods on the cars. A handful of buyers often don’t want to wait a few months, leading to a slight push into the used-car segment. However, it is important to note that in the luxury segment, demand is less price sensitive than in the mass segments.
Q: Is there an inverse relationship between economic recovery and the pace of business in the used luxury car segment?
A: While this may be true in the mass car segment, the luxury segment operates in a slightly different way. It’s the timeless allure of a luxury brand, which continues to be a buying factor for customers.
Q: Audi has been on a product launch spree lately. What impact do these launches have on the brand’s used car business?
A: Our overall business strategy is centered on four pillars: Human Centricity, Digitalization, Product and Network. Since we are an automotive company, the focus is on the product pillar and new launches, of course. In 2021, we launched nine new cars including five electric cars. New launches are definitely driving the demand for used cars. When new cars are launched, customers make new purchases and most often consider changing vehicles. This leads to a good supply of used cars on the market.
Importantly, new car launches also act as brand amplifiers, provide additional visibility and are high on the emotional quotient. There is additional opportunity and this is contributing to the growth of the used car segment.
Q: What is the most popular used Audi model in the country right now?
A: All of our used models enjoy immense popularity among customers. However, if we have to select – it would definitely be the Audi Q3 and the Audi Q5. These cars are very popular with fans and continue to be very popular used car models in India.
Q: Could you elaborate on the demographics of the used car market for Audi – age groups, region, cities, vs cities?
A: Our Audi Approved: plus showrooms are located in several cities across the country. Currently we have 16 Audi Approved: plus installations in India and our plan is to increase this number to twenty by the end of the year. We are seeing continued demand for used cars in metropolitan cities like Mumbai, Delhi and Bangalore. Also, the demand is increasing in cities such as Jaipur, Ahmedabad, Coimbatore, Ludhiana and Karnal. Customers who are considering owning a used luxury car are typically in their late 20s and early 30s – they are also first-time car buyers. Additionally, there are customers in the age brackets of 30 to 60 who also buy our used cars.
Q: How is Audi Approved: plus different from other players in the segment?
A: Audi India entered the used vehicle segment more than ten years ago. At Audi Approved: in addition, we thoroughly inspect every used car. As part of the Audi Approved:plus program, we offer our customers 24/7 roadside assistance and offer one-year and two-year unlimited mileage warranty options. Additionally, we maintain transparency and ensure that our customers have the full vehicle history prior to a purchase. Customers can also take advantage of easy financing and insurance options when buying from Audi Approved: plus.
Q: How do you see the market for used Audi EVs emerging and evolving in the coming times – in India and globally?
A: It is too early to comment on the emergence of a market for used Audi electric vehicles. We entered the electric vehicle market with five models just over a year ago. People who buy Audi electric vehicles may not be selling them anytime soon. In India, it will be some time before we see a drastic movement in this space. Yes, there will be a handful of customers who may want to sell their EVs, but demand versus supply will not be proportional.
Q: How does Audi meet the challenge of offering the same high level of shopping experience to customers in the used vehicle segment for new units?
A: We have grown our Audi Approved: Plus facilities in India from seven in 2020 to 14 in 2021, and this year we are already operational at 16 facilities. We will add four more facilities this year to end the year with 20 operational facilities. We have trained staff at all of our facilities; so there is no challenge per se, in the experience a customer receives. Customers interested in purchasing an Audi Approved:plus car can browse a wide range of Audi products available online from the comfort of their own home. When a customer buys a used car from Audi, they have the option of roadside assistance, personalized service plans and loan facilities, which we also offer for our new cars.
Date of first publication: May 25, 2022, 11:17 a.m. HST