Friday, July 22, 2011
By CarKhabri Team
Selling Super Luxury car, a big challenge
In 1987, when Marico a consumer product marketer was founded by Harsh Mariwala then four years later in 1992 his US returned cousin, an electronic engineering graduate opened a Tata Motors authorized service centre. Though the economy that time was really ripped off but his profits are constantly growing. He constantly shifted his business dealerships from Mercedes Benz servicing to Honda dealership. Now Lamborghini is his new dealership scenario and a whole new iconic transition took place for him. Similarly like Mariwala, Sharad Kachalia who now holds the dealership for the Rolls Royce also did a transition from his firm Navneet Motors which was among the largest Maruti dealerships in the country.
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In all there are now fewer than 30 outlets for the luxury cars such as Bugatti, Lamborghini, Porsche, Rolls Royce, Bentley etc. and only a few selected 15 car outlet owners are there to satisfy the rising demands by wealthy customers. However all the initial investments were done at private level because the carmakers are still not sure about the investment returns in terms of volumes. Also the luxury carmakers have problems in selling cars in traditional outlets considering the cylinder variation. Though John Chacko, president & managing director of Volkswagen India told reporters that the company is focusing currently on large volume brands but plans are also under scrutiny for their top products like Bentley or Bugatti.
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Among the 15 luxury car dealers, Mariwala said that in this business the initial investment is really high and gestation period is quite long. Other Luxury car importer Satya Bagla, managing director of Exclusive Motors said they deal with very high overheads and the inventory figure rise upto several crore.
The surprising fact is the huge margins which these outlet owners enjoy which ranges from 14 to 25 % in terms of profit. Sales of up to 3-5 units are considered favorable considering the superb profits from the sales. There are a lot of technical requirements to become a luxury car dealer. The combination of investment, product information and market analysis is needed along with the technical complexities to get successful as told by Ashish Chordia who deals in Ferrari, Maserati and Porsche.
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In this business the cars are sold mainly by verbal convincement to a customer who takes a lot of time. Generally a deal is finalized in 5-6 months by this time a buyer connects itself with the brand image and heritage it carries. Websites are also becoming a great medium to gather information, now even the interior designing and car configuration options are available with a click of a button added Chordia.
In the amazing concept of ‘Flying Doctor’, the technician and spare availability is ensured at any location countrywide. The trained technicians and Dealers are updated on a regular basis and their efficiency is increased by overseas exposure.
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The growing wealthy class is directly linked with the demand of these super luxury cars. Lalit Choudary, MD at Performance Cars told that Indians are now globally more exposed to the niche brands and they are relishing the fact that these brands are available in India with superb sale outlets and services.