The used car segment of Indian automobile sector has witnessed a sharp turnaround despite the global crisis led by COVID-19. Consumer demand has grown considerably amidst the pandemic as more buyers are interested in buying personal vehicles instead of using public means of conveyance. According to a recent report by the Society of Indian Automobile Manufacturers, the pre-owned Indian automobile industry which accounts for over 18% of the market share recorded sales of around 4.4 million units in FY20. The new passenger vehicle sales in FY20 decreased considerably and registered around 2,775,679 units. The new automobile industry dipped below the 3 million sales unit mark for the first time ever since FY17.
Last year, the industry was valued at 180 crores and it was expected to grow at a CAGR of 15.12 per cent in the forecast period of 2020-2025. While the progress is slow, its been steady due to the recent events. Additionally, the demand from tier-2 and -3 cities for used luxury cars has given the industry a new perspective. As more buyers are becoming aspirational, the demand for pre-owned automobiles is expected to grow further which will in turn help the used car dealerships penetrate deeper into the non-metro cities of India.
The COVID-19 pandemic may have hit the automobile industry quite hard as businesses were brought to a grinding halt, workforce was displaced, and many were left with their purchasing power restricted. However, it proved to be a silver lining for the used luxury cars market. Factors such as depreciation and Bharat Stage VI norms also played an important role in changing the perception of several customers.
Big Boy Toyz, a renowned used luxury car dealership in India, is a perfect example of how having higher aspirations can lead to success. Jatin Ahuja, founder and managing director at Big Boy Toyz, has created a popular retail brand in the pre-owned car market by selling high-end luxury cars such as BMW, Audi, Lamborghini, and Range Rover and making dreams turn into reality for many Indians. It started with his passion for the four wheels and the business behind it. In 2009, he launched Big Boy Toyz, where pre-owned luxury cars could be refurbished and sold. Within its first year of operations, BBT made a turnover of Rs 6 crore and it kept increasing thereafter.
The company sold over 150 cars from April to September 2020. The price range of these cars was from 80 lakhs to 2 crores. Maximum sale during the said period happened via online transactions and cars were delivered to the customers as per Covid-19 norms. As per Jatin Ahuja, some of the most sold cars despite the lockdown were Mercedes S500 Maybach, GLS 350, Porsche 718 Boxster, BMW i8, Range Rover Sport, Lamborghini Huracan, and Bentley Continental GT Coupe.
Although the sales of Big Boy Toyz dropped down to around 30% during April 2020, the company saw considerable signs of recovery from May 2020. The business was revived and improved to 40-45% in May 2020 and further stabilized at 80% of the operations in June 2020.
The sales figures from April to September 2019 were comparatively lower than the current sales figures in 2020. Considering the number of cars Big Boy Toyz sold in the second quarter, the company is now expecting 20%-30% hike in sales during this festival season.
The brand has had an effective online presence even before the pandemic as about 70-75% of their sales would happen on that medium. With the global pandemic shifting customers from offline shopping mode to online, BBT decided to bring in a digital effect with their newly launched mobile application in the company’s name. Available for both iOS and Android devices, this application hosts a multitude of features such as to enhance the digital buying experience of its customers. It comes with options where users can book cars online, request for a 360-degree view of via photos and videos, buy BBT merchandise, access the secured payment gateway, and view a range of car comparisons. App also allows users to download wallpapers.
The car dealership has increased footfalls via virtual platforms and open virtual offices. In terms of logistics and finances, BBT has very sturdy plans for the upcoming year as they will be venturing into the eastern and western parts of India while eyeing on achieving the same profits as last year.
As customers from tier -2 and -3 cities are also transitioning towards the digital means, the automobile sector has a great potential in these cities. BBT has also started receiving about 30 – 35% enquiries from the Tier -2 and -3 territories. The brand is now planning to expand in many tier 2 and 3 markets in the coming months.