Volkswagen expects to double pre-owned car sales to 20,000 units this year

German premier carmaker Volkswagen is expected to double its pre-owned car sales this year to 20,000 units, amid a shift in customer preference towards the used vehicles, according to a top company executive.

Volkswagen entered the used car market in 2012 with the launch of its first Das Welt auto showroom.

In June last year, soon after the pandemic hit the country last year, the carmaker launched Das WeltAuto 3.0, the brand's digital window to facilitate buying and selling of used cars through the DWA website.

"In the past almost two years, the one clear shift in customer preference I see is that customers are going for additional cars. That's driven by the need for individual mobility. So, people who can afford to buy a car again are more likely to buy an additional car," Volkswagen Passenger Cars India Brand Director Ashish Gupta told PTI in an interaction.

The challenge that is coming is in new buyers coming into the market and that is where the need for mobility is, again and again, driving the demand, which is now shifting to pre-owned cars, Gupta said.

He added, "In this segment also, we have a strong presence with our Das Welt Auto brand."

"Last year, we sold close to 10,000 pre-owned cars. This year, we are on track to sell 20,000. So, that's the kind of uptick we see," he said.

According to a study by Frost & Sullivan, commissioned by Volkswagen earlier this year, the pre-owned car market in India is expected to cross around 4-4.5 million cars by 2025, which will be almost 1.5-2 times the new car market, he said.

"So, going forward, I think that with this customer trend, or this customer preference changing, we have to make sure that we keep both the streams (new as well as pre-owned car sales) running that," Gupta added.

He said that along with this shift, one can see a great uptick in highly-priced cars in the premium and luxury segment as well.

There seems to be a lot of revenge buying happening in the market where customers are putting off their purchases and they are now going out and splurging on expensive purchases.

"At the same time, I think there will be long-term effects of the two to two-and-a-half years and you will see customers preferences moving towards lower or lower purchase price cars. So, that's going to be a shift that I foresee at least. Let's see how it pans out," Gupta said.

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.

Gupta added that the company at the initial stage was hoping of not getting hit by the semiconductor shortage "but it has come and affected us now with global supply being so constrained".

Going by the global analysts and based on the current situation, it will continue at least till the first half of 2022, he said.

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.