BMW-Now in Used Car market

Luxury cars that till date excluded from being available at competitive rates are now expanding their reach by entering into the used car segment soon. A major German carmaker BMW recently announced that BMW Premium select would be rolled down by the middle of the year 2010. To support its business in this segment, the luxury carmaker has applied for a licence from an NBFC (non banking finance company). The carmaker plans to have separate business units to support each of its activity that is selling cars, financing the buyer, or financing the used BMW cars

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BMW over the years has started considering India as a target market in the luxury segment. BMW India had sold 3619 units in the past year. Peter Kronschnabl, managing director, BMW India, was seen quoting recently that this would open up a totally new group of potential buyers who wish to own this premium car brand but cannot afford it presently. As this venture is new to the Indian market, the company officials were not in a position to quote the level of demands presently.

Following BMW is its close German competitor Mercedes Benz expected to soon jump into the fray. The top-officials from the company said that the OEM would start this as a separate business in another six-eight months.

The funds required to finance used cars in this segment is around 5-6 Crore. Ayaaz Fazulbhoy, director, Fazulbhoy Motors, a Mumbai-based used car dealership, recently pointed out that the entry of such OEM’s would offer warranties etc into this segment. India certainly looks forward to such participation from popular OEMs. The BMW Premium select business would start initially at the Gurgaon dealership.