Volkswagen bets big on used cars

German major feels customer trends shifting towards individual mobility

Mumbai: German premier carmaker Volkswagen expects to double pre-owned car sales this year, up to 20,000 units. This comes amid a shift in customer preference towards used vehicles, says Ashish Gupta, Brand Director, Volkswagen Passenger Cars India. Last year, soon after the pandemic hit the country, the carmaker launched Das Welt Auto 3.0, a digital window to facilitate the buying and selling of used cars through the DWA 3.0 website. Their foray into the used car market came in 2012, with the launch of the first Das Welt Auto.

“In the last two years, the one clear shift in customer preference I have seen is that customers want additional cars. That’s driven by the need for individual mobility. People who can afford to buy a car again are likely to buy an additional vehicle,” Gupta said. This shift towards used cars, he says, is also emphasised by new buyers entering the market, who drive the demand and are leaning towards preowned cars. Our Das Welt Auto has a strong presence in this segment too, Gupta remarks. “Last year, we sold 10,000 pre-owned cars. This year, we are on track to sell 20,000. That’s the kind of uptick we see.”

According to a Frost & Sullivan study, commissioned earlier this year by Volkswagen, the pre-owned car market in India is expected to cross around 4-4.5 million cars by 2020. That is alm o s t 1.5-2 times the new car market. “Going forward, I think that with this customer trend, or customer preference changing, we have to make sure that we keep both the streams (new and pre-owned car sales) running,” Gupta added.

Revenge buying

Customers who have put off purchases over the two and a half years are now splurging on expensive items. Even so, believes Gupta, there are long term effects of the slowdown and “you will continue to see customer preferences moving towards lower or lower purchase price cars. That’s a shift I foresee, at least. Let’s see how it pans out.”

Semi-conductor shortage

The shortage of semi-conductor and supply-chain issues has been the biggest challenge for the automobile industry in 2021, which has also been caused by the pandemic in some way, he said.

While the company did hope initially that it would remain unaffected by the semiconductor shortage, “It has affected us now with global supply being so constrained.” Going by the global analysts and based on the current situation, Gupta believes it will continue at least until the first half of 2022.

He added, “I think that only by the third quarter would you see some easing of the situation if we do not have another lockdown happening or another wave of coronavirus affecting the world.” he said. -(PTI)