BMW cars command premium over Merc, Audi in pre-owned market

Despite considerably cheaper ownership cost of pre-owned Merc and Audi cars, their counterparts from the BMW stable command a premium, according to an industry report.

"BMW vehicles (pre-owned ones) command a premium over Audi and Mercedes even though latter's service cost is 24 per cent and 29 per cent, respectively lower than of the former," said the report by IndianBlueBook -- a Mahindra Group service offering pricing and analytics for new and pre-owned vehicles.

Total cost of ownership of a luxury car is expected to be over 60 per cent of the on-road car price after three years, it said, adding residual value and total cost of ownership are important parameters for luxury car buyers.

Citing a survey, the report said the domestic luxury car segment is still in its nascent stage with only Merc, Audi and BMW brands dominating over 90 percent of the market.

High-end cars are extremely popular in the pre-owned segment and their certification is an important driver of this segment's growth as their resale value falls by 50 per cent after three years.

The report warned the demonetisation drive will have an adverse short-term impact on sales of both new and pre- owned luxury cars.

Online searches for luxury cars account for close to 7 per cent of total luxury car searches compared to 1 per cent share of sales they represent, the report added.