Q3, Q5 dominate Audi pre-owned model sales, company expects momentum to continue

Audi India Head Balbir Singh Dhillon explains how new launches act as brand enhancers, helping even the pre-owned luxury car segment.Audi India has doubled its pre-owned vehicle sales channels from seven to 14 in a year between 2020 and 2021.
By : Shubhodeep Chakravarty
| Updated on: 25 May 2022, 11:17 AM
Balbir Singh Dhillon, Head of Audi India, posing with the new Audi Q7.
Balbir Singh Dhillon, Head of Audi India, posing with the new Audi Q7.
Balbir Singh Dhillon, Head of Audi India, posing with the new Audi Q7.
Balbir Singh Dhillon, Head of Audi India, posing with the new Audi Q7.

The pre-owned vehicle market has seen an uptick in recent years, partly because of the preference for personal mobility in Covid-19 times and also because of a need to keep personal finances in check. The pre-owned luxury car space therefore has also made most of the growing opportunities and Audi India has been well positioned to bat on the front foot.

In an interview with HT Auto, Audi India Head, Balbir Singh Dhillon explains how luxury used-car space has witnessed growth over the years and elaborates on the vision and functioning of Audi's own pre-owned car channel -  Audi Approved: plus.

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Here is an excerpt from the interaction with Dhillon:

Q: How has the pre-owned luxury car market evolved in pandemic times?

A: The used car market in India has seen immense growth in the last two-three years. In the mass car segment, it is more to do with opting for personal mobility over public transport. When you move higher-up, to 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 the easiest to do so through the pre-owned car channel.

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For Audi India, we have seen significant growth in the last two to three years. In 2021, we witnessed a 39% growth and in the first quarter of 2022, we have witnessed a 50% growth; this will only continue as we move forward.

Q: How is rising vehicle price and long waiting times (part shortages) affecting demand for pre-owned Audi vehicles?

A: There was a lot of pent up demand since the pandemic, due to the semi-conductor shortage and more recently, supply-related constraints. This demand could not be fulfilled entirely and has led to waiting periods on cars. A handful buyers often don’t want to wait a few months, owing to which, there is a slight push towards the pre-owned car segment. However, it is important to note that in the luxury segment, demand is less price-sensitive than in mass segments.

Q: Is there an inverse relationship between economic recovery and the pace of business in the pre- owned luxury car segment?

A: While that may be true in the mass car segment, the luxury segment operates in a slightly different manner. It is the timeless allure of a luxury brand, that continues to be a buying factor for customers.

Q: Audi has been on a product launch spree in recent times. What impact do these launches have on the pre-owned car business of the brand?

A: Our overall business strategy is focused on four pillars – Human Centricity, Digitalization, Product, and Network. Since we are a car company, there is added emphasis on the product pillar and new launches, of course. In 2021 we launched nine new cars including five electric cars. New launches definitely spur demand for pre-owned cars. When new cars are launched, customers make new purchases and most often look at changing their vehicles. This leads to a good supply of pre-owned cars in the market.

It is important to note, new car launches also act as brand enhancers, offer added visibility and are high on the emotional quotient. There is added desirability and this does aid growth in the pre-owned car segment.

Q: Which is the most popular pre-owned Audi model in the country at present?

A: All our pre-owned models have immense popularity among customers. However, if we have to select – it would definitely be the Audi Q3 and Audi Q5. These cars have a strong fan following and continue to be a very popular pre-owned car models in India.

Q: Could you elaborate on the demography of the market in the pre-owned car business for Audi - age groups, region, cities, vs towns?

A: Our Audi Approved: plus showrooms are located in multiple cities across the country. Currently, we have 16 Audi Approved: plus facilities in India and our plan is to increase this to twenty by the end of year. We are seeing continued demand for pre-owned cars from metro cities like Mumbai, Delhi and Bengaluru. In addition, demand is picking up from cities including Jaipur, Ahmedabad, Coimbatore, Ludhiana and Karnal. Customers who look at owning a pre-owned luxury car are typically in their late 20s and early 30s – these are also first-time car buyers. In addition, there are customers in the age groups of 30-60 who also purchase our pre-owned cars.

Q: How does Audi Approved: plus differentiate itself from other players in the segment?

A: Audi India entered the pre-owned segment more than a decade ago. At Audi Approved: plus, we thoroughly inspect every pre-owned car. As part of the Audi Approved: plus programme, we provide customers with a 24x7 Roadside Assistance and have the options of one-year and two-year unlimited kms warranty. In addition, we maintain transparency and ensure that our customers have the complete vehicle history before a purchase. Customers can also avail easy financing and insurance options when buying from Audi Approved: plus.

Q: How do you see the market for pre-owned Audi EVs emerging and evolving in the times to come - in India and globally?

A: It is too soon to comment on the emergence of a market for pre-owned Audi EVs. We entered the EV market with five models just a year ago. People who are buying Audi EVs may not be selling them any time soon. In India, it will be a while before we see any drastic movement in this space. Yes, there will be a handful of customers who may want to sell their EV, but the demand vs supply won’t be proportionate.

Q: How does Audi meet the challenge of providing the same high level of buying experience to customers in the pre-owned 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 in 16 facilities. We will add another four facilities this year to end the year with 20 operational facilities. We have trained staff at all our facilities; so there is no challenge per se, in the experience that a customer receives. Customers interested in purchasing an Audi Approved: plus car can browse through a wide range of Audi products available online from the comfort of their homes. When a customer purchases a pre-owned car from Audi, he has the option of Roadside Assistance, Customized service plans and loan facilities, all of which we also offer for our new cars.

First Published Date: 25 May 2022, 11:17 AM IST
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