ŠKODA AUTO India introduces pre-owned cars programme

Joining the likes of Maruti Suzuki, Toyota, Honda and other car brands, ŠKODA AUTO India has introduced a programme to buy and sell pre-owned cars.

SKODA AUTO India has introduced a 'Certified Pre-Owned' programme with an exclusive range of handpicked vehicles. The cars will be assessed by trained professionals across a set of 160-plus points of inspection, and wherever necessitated, restored to past glory using genuine parts and accessories.

ŠKODA AUTO vehicles bought under the programme will come with a manufacturer-backed warranty of up to two years (24 months), or 150,000 km (whichever is earlier).

The designated programme will also house automobiles that do not don the ŠKODA badge and can be purchased, nonetheless, with a warranty of up to a year (12 months), or 15,000 km.

Moreover, customers can trade in their old cars (that may or may not be a ŠKODA AUTO offering) and be rewarded with attractive exchange bonuses for the purchase of a new ŠKODA AUTO vehicle, be it the executive sedan, SUV, or the RS.

Zac Hollis, brand director, ŠKODA AUTO India, acknowledges that the Coronavirus pandemic has not only disrupted the auto sector, but has also changed the buying behaviour of the consumer.

“We see great potential in the pre-owned car segment in the current scenario, as personal mobility has gained significance. In the long-term, this segment will see huge growth as customers have evolved and are indulging in frequently upgrading their vehicles. The 'Certified Pre-Owned' programme is part of our growth strategy in India as we are extending our business model to match our aspirations.”

Hollis says that there has always been a good demand for second-hand cars, but the market is largely unorganised. He adds that the pandemic brought a surge in the volume of trade for pre-owned cars, but consumers now are also being conscious of their choice of car, the quality, mileage, colour, and other safety and performance parameters.

"So, having a certified pre-owned car from an authorised player gives consumers value for money and also the peace of mind for their used car. But yes, we could say that the need for personal safety and hygiene is a strong influence in the decision of buying a pre-owned car."

According to a press note, customers, who want to sell, can also upload the pictures of their cars, share the requisite details and select the dealer of their choice. The company’s portal has been integrated with a pre-owned pricing tool available in India, thus the consumers get the benefits of the best price.

From the comfort of their home/office, the customers can also request for a virtual live demo of the car through the website. The company has also launched an exclusive app for digital evaluation of a customer’s car and integrated solutions.

Avik Chattopadhyay, founder, Expereal, a brand consultancy firm, explains that the used car market in India is in the middle of a revolution because of the COVID-19 situation. He says that typically, the ratio of people preferring new to used cars is 1:1.6, which is typically a sign of a maturing market, where the first-time buyer still prefers to buy a new vehicle over a used one.

“In developed markets, like Europe, the new to used cars ratio is 1:3, roughly. In India, there is a huge status which is attached to buying a new car, as opposed to buying a used one.”

Chattopadhyay adds that the pandemic has changed the way people use cars. “Most people are working from home and others may not want to use public transport as they may consider it unsafe. And hence, they’re considering buying their own personal mode of transport, either a two-wheeler or a second-hand car.”

He tells afaqs! that in the initial period of the pandemic, there was a huge spike in people buying used cars. But he theorises that a year from now, people will be back in their offices and also using public transport. For those people, who immediately need to move around, there is a need for buying their own personal transport.

“People might want to save for a rainy day and thanks to salary cuts, there have been executives selling off cars too. These are some of the ways that the used car market will see traction in India right now.”

Chattopadhyay discusses consumer behaviour and explains that the main reason a person would want to go to a branded pre-owned car dealership, like Maruti Suzuki’s True Value, is if he has a specific car model in mind that he wants to opt for. This normally happens once he does his research on the kind of car he wants to buy.

“A user is more likely to approach an aggregator of used cars if he has a budget in mind and is open to choosing different models of cars from different brands.”

The pitfalls with these channels, according to him, is that with a branded dealership, costs tend to be higher, but with a digital aggregator, they may not be able to follow through when it comes to after-sales service.

Rayomand J Patell, CCO at Idealakes and a long-time car enthusiast, points out that the advantage that online aggregators have over brand-specific pre-owned car programmes is variety. “Most aggregators can offer variety at the touch of a button, whereas with the branded dealerships, you tend to have a limited set of models to pick from.”

According to Patell, opting for a pre-owned car makes sense in the context of the pandemic. Now, people would want to avoid taking public transport. “The thing is, economically, it’s a smart choice to make to opt for a used car. The difference between aggregators, who offer used cars from different brands, and brand-specific offerings is that the branded enterprises don’t charge as much for the cars.”

Patell says that the choice to buy a pre-owned car can be a mental block for some consumers, but adds that brands take adequate measures to check the car’s different parts to ensure that it is as good as it was the day it left the factory. “With pre-owned cars, there are no new registration taxes, the whole route of getting the loan and the EMI sorted becomes significantly easier. It's a smart choice to make overall,” he concludes.