Resale Value - The Killer opportunity

[ajmat]

In my previous article, I talked about Resale as a killer. As I am sure Samurai will tell you in combat, weakness can be turned into opportunity and so

Resale losses - The Killer Opportunity

Why do some cars have poor resale ?
Due to various factors, a lot depends on proper supply demand matching and brand management. Honda are masters at this, most Honda's come in to order unless the dealer orders stock. One also finds that some companies stratch the brand too far and burn their fingers - Hyundai and ford are prime examples. Some cars, well, just never took off - Zen Estilo. Some cases, parts are expensive and take time to come in - Mondy's and Vectra's. Of course, there is the issue of obsolescence. The following list is a compilation of cars which are not bad cars which will not give grief to the only. They are victims of marketing hype or blunders.

Before we go further - A quick lesson in pricing


Selling Price - what the manufacturer thinks it will sell at - you know, these guys really know their stuff, i.e. the stuff that they smoke

Market Price - what the market will pay - however, this is rigged - keep the price high and rig the deal with hyped sweeteners like finance deals, service/ warranty offers, teflon coating, flights to Bangkok to unload stocks. Sometimes, white good manufacturers tie up to unload their stock as part of a deal to help the car dealer unload stock

Secondhand Market Price - This is the true price what people will pay - it combines, ability, sentiment, brand, knowledge, perception, rumours, lies to arrive at a price what people will pay.

Ladies and Gentlemen, the list of killer opportunities of cars worth owning for much less than when new.

Small Cars

Chevrolet Spark - Every time a relative of mine has a birthday, the Spark gets a price cut - rubbishing used values. This car is good but could do with more power.

Chevrolet U-VA/ Aveo - Cheap, well priced but excels at nothing - the market wants something which is a winneror has a distinct winning feature. Good appliance!


All Fiats -Only the sheer metal weight preserves whatever value of what is a good competent car. Brand management, dealers needed to boost values. 1.6's are music to one's year and as cheap as a napster download.

Hyundai Getz - A great car spoilt by dopey pricing. Brilliant space, smooth controls and engine if bit rolly poly and tinny but it has its charm. They sniffed too much kimchee when pricing this.

Swift LXi - has nothing, you get nothing for a decent driving machine. makes a good strip down candidate for a track day car

Swift ZXi - - will cost as much as a Vxi secondhand- Indians have a death wish as they do not value the safety features which this car is about.


Zen Estilo - Wagon R looks with Alto space - totally confused. Add tacky interiors and no one wants it except in Jakarta.. Makes a good runaround though if cheap.

Petrol Indica's and Indigo's - Most people have heard of diesel ones. Everyone has heard a diesel one. Big hit with BPO's (into innocent motorist's that is!). But there is a petrol version using diesel innards making it an understressed engine. My boss has one. It takes so long to warm up, she only gets 6km/l on her 2 km commute.

Small Saloons

Fords - Petrol, Ikons, Fusions and Fiesta's - These are great cars to drive but cost to own due to greedy dealers. They could be great value especially the Fiesta and Fusion if you can source service parts from the UK and have a good mechanic. (these cars are considered cheap as chips to run overseas). Beat the dealer monopoly and you have a great car. Just make sure no one put petrol in that TDCi by mistake

Hyundai Accent Viva - You are fooling us if you said it was sporty

Hyundai Verna Petrol - models - a competent less scary car than the CRDi but no one knew it was there. Our fuel consumption obsession strikes again. Discounts on offer savages resale.

Renault Logan Petrols - overpriced competent car but so many prettier choices when secondhand. Meant to be cheap and the market will say so.

Baleno - Too many downward price revisions, flat bum and obsolescence make this a bargain performer

SX4 VXi - Everyone wants a Zxi so these will be offloaded at big discounts


Mid size Cars

SRV - Good looking, potential Fabia buster.....if only it was priced properly. the market will respond. The market will correct price leaving an Optra interior for a swift price

Optra 1.8- This is a good car but overshadowed by the diesel and the 1.6. 1.6 has decent performance and smoother engines compared to 1.8. and a deficit of 8 bhp. - nothing that a Free flow filter can fix, you say? A certain old man has tried using a modded 1.6 in addition to his shining 1.8 and states despite mods, the 1.6 lacks the viagra touch! So go seek out that unloved 1.8 - a fully loaded one has lots of goodies.

(EDIT Note - a certain old man is sulking after having written this note!)



The Lower D Gang

Hyundai Elantra - The hidden secret - Looks like a bloated Accent combined with "silver teethed rat front end" - Makes it look crass. Hyundai cheapo image and Octavia affected brand at this segment. But the engine + a busa box make it go like stink. fully loaded petrols going for 4.5L and you get ABS, ASR etc!

Sonata- looked like a home made Jag and wobbles like like a jellied accent.

Embera looks decent but interior shouts taxi. Diesel version not much different from the Elantra. Why are we paying more? Saw a petrol advertised for Rs 10L a couple of weeks back.

Honda Accord V6's - wonderful car for the money but our obession for fuel economy will ensure judgement day. Chances are the original buyer was a company which gave a monkey's for fuel costs. The secondhand market wants things to run on peanuts. Funny but a 2.4 manual is not too much faster

Honda Accord 2.4 - Future Prediction after a couple of years, once supply of the new Accord stabilises, these will go down in price but only to a point

Mitsubishi Cedia - bit like that slim nerdy girl - under the conservative skin, it has an engine and chassis which can take more. Poor support and branding make this a killer deal. A one year old went for just under 7 lakhs, 2 lakhs down the drain.

Skoda Petrol Octavia's and Rider TPi - The diesel at the same price version made this a still born. With superior braking, this is a great deal. Petrol consumption a little higher than the norm but with good ones going for 5 lakhs. Not a bad deal for the low annual milaege, long journey person. Rider TPi's are a killer sleeper car. I nearly bought one for Rs 7 lakhs. RS's are a little more - I bought a very low mileage one for 60% of the original price but in Bangalore - they are more expensive due to pose value - mumbai and delhi - you buy a BMW. Be warned, indians don't like performance cars so you won't see anything like this for a while.

Laura LnK - Future Prediction- VW will poke its nose in and reposition this car - this is an opportunity when it happens.

Opel Vectra - Is this guy on dope? Well parts are rare and expensive but no one has had a problem with this car unlike the mondy. Buy if you travel to europe and can pick up bits.

The Upper D gang- stuff that used to be 20-30L

Audi A4 - Well, there aren't any on the market yet but the 4 lakh discount on runout models will have its effect on those who paid full whack. Recently before the new A4 was announced, a 6 month old A4 was advertised for resale at 24L. My bet was it would have gone for 20L. A similar deal today will see it go for 17L. Why buy a Laura when you can have a more powerful Audi!

BMW 320i - please read further down

Superb Petrol - ]A wonderful slush mobile. Not the best performer but enjoyable. Why not the diesel - well, wait till it gets on a bit and you need a new belt change and timing reset. VAG mechanics hate this engine!

Nissan Teana - Anyone seen one beyond the Leela hotels?

Toyota Camry - old one - never be seen wearing white and driving one. This car is for your father as it will be soft on his haemarrhoids


Luxury Cars

BMW 320i/523i - This is speculation - my guess is that us injun's like it big or diesel. These two models are nice to drive but they lack zing. The bigger engine models are a different story. With a diesel alternative for not much more, these guys will be ignored unless BMW buy the old ones and control the market

Mercedes
w124 - looks old, but so what - last of the traditional ones. Plenty of grey market support to keep this running for ever.
w210 - later models - decent if old looks - competent car but not much more - great third car for long journeys. Not as urable as the w124
w211 - E240, E220D - great cars but average performance, the later E270D wiped them out. E280 is another killer deal if you do not travel too much
w220 S class - the S350 L - all bugs ironed out. Posers gone for the new bling machine. You can buy one cheaper than a new E class


SUV's

BMW X3 - Neither here nor there and as expensive as an X5 - the market will sort that one out!

Terracan - Looked like a Land Cruiser but was not. Brand stretching and a little bit more for a Pajero, as well as the Tuscon meant that this car bombed. Beware - underneath, it is a Pajero with beefy engine

Grand Vitara XL7- Smooth Gas Guzzler - another brand stretcher that lost its elasticity. Great service backup but cramped for a 7 seater. If you are going in a straight line over the rough, have fun but remember, it has drum brakes at the rear!

Forester - Wonderfull car but be prepared to wait and pay for parts, which rarely do not go wrong. It's only sin, it does not look SUV'ish for the money

Future Prediction- New CRV 2.4 - Except for sunroof, it look identical and guzzles more fuel than the 2.0L for a marginal performance increase. Who really cares about 4wd and dragging in an SUV?

Versa - The second big mistake of Mr Bachchan, First mistake was his choice of friends to fill the van with. Good nippy MUV for town though.

Nissan Xtrail - overpriced, few dealers. Examples switch for 16 lakhs - 10lakhs less than new. Overseas, have heard abut turbo failures though.

Safari - Tata Gremlins scares people - take a few steeroids and face them and you have an awesome beast.


Now gather your readies and spend 'em. Will update this article as and when. Let the debates begin!

[rangaraj]

Hi ajit,

Good summary of the indian auto industry. Wrote it before heading of for a game of golf?
Couple of notable ones missing - The Lancer and the Pajero from Mitsubishi, Corolla from Toyota, and the MUV / people mover segment - Innova/Qualis/Tavera, and of course the Scorpio..And of course the darlings of the small car industry for a long time - the 800 and the ZEN...

[Sush]

You have summed it all

[ajmat]

Originally Posted by rangaraj

Hi ajit,

Good summary of the indian auto industry. Wrote it before heading of for a game of golf?
Couple of notable ones missing - The Lancer and the Pajero from Mitsubishi, Corolla from Toyota, and the MUV / people mover segment - Innova/Qualis/Tavera, and of course the Scorpio..And of course the darlings of the small car industry for a long time - the 800 and the ZEN...

Actually, completed it when booking a timesheet- splitsecond timing is required!

Lancer - yes - Pajero- still overpriced on the secondhand market hence not included.

MUV's - the have good resale values hence not included - am targeting cars which have/ potentially have poor resale values but have nothing fundementally wrong with them

[shuvc]

Nice compilation. One observation. Base SX4 comes in VXi trim, not LXi.

[BUSA]

Fantastic complilation Ajit.

Grand Vitara - Smooth Gas Guzzler - another brand stretcher that lost its elasticity. Great service backup but cramped for a 7 seater. If you are going in a straight line over the rough, have fun but remember, it has drum brakes at the rear!

Ajit, the GV sold in India is a 5 seater.

SX4 LXi - Everyone wants a Zxi so these will be offloaded at big discounts

SX4 doesnot come in LXi, the base variant is the VXi.

What about the Corolla, the recent revision in pricing will hurt the resale, same with the Octavia Diesel, now with a 1.5L price cut.

[rjstyles69]

Ajmat good compilation there. Truly an eye opener for people looking at buying cars based on the brand image.

My money would still go to the Indian Car manufacturers.

Safari - Tata Gremlins scares people - take a few steeroids and face them and you have an awesome beast.

Now I know why we don't find too many 2nd hand 3ltr Dicors in the used car market.

[Rahulk76]

Originally Posted by rjstyles69

Ajmat good compilation there. Truly an eye opener for people looking at buying cars based on the brand image.

My money would still go to the Indian Car manufacturers.


Now I know why we don't find too many 2nd hand 3ltr Dicors in the used car market.

Nice Compilation Ajmat....

@rjstyles69..In Pune you will find lots and lots of 3ltr dicor for sale. Everyone is dumping erstwhile 3 ltr for 2.2 except a few .

Rahul

[rangaraj]

Originally Posted by BUSA

Fantastic complilation Ajit.
Ajit, the GV sold in India is a 5 seater.
.

He is talking about the older GV XL-7.. which was a 7 seater. This was the first version they sold in the country..

[rjstyles69]

Originally Posted by Rahulk76

Nice Compilation Ajmat....

@rjstyles69..In Pune you will find lots and lots of 3ltr dicor for sale. Everyone is dumping erstwhile 3 ltr for 2.2 except a few .

Rahul

Well I was talking about bangalore my friend .

[rubin2006]

IT is a comprehensive handbook on second hand cars. One more thing is if any one could write where and what model they have seen in the used car market and at what price condition ect .

This would make it as a complete thread for further references if any one is looking for any car which are listed here or any other models not listed

Over all a very nice and detailed view of second hand market ,By the way i did not see the Honda civic in here which people are buying and selling ,though i fail to understand why they re selling so so and so early and one more thing why is Toyota corolla the world renowned car hell bent of killing the resale of the car by giving discounts which would make GM the global resale killer think Twice .

If they cant beat civic then they should get the new corolla faster than taking this corolla down to or some Level below the upper models of Honda city because if some one got a top model corolla at 13 lacks 3 years ago he is only getting 5.5 lacks today thats is as bad resale as our Mitsubishi or GM or skoda petrol we crib about all the time

[snaronikar]

Nice comprehensive report of all the cars. For prospective buyers, this can be like a bible to know what the cars can offer and what it does not.

[ankit.jhamb]

""good report"" is what i can say for this ,
SX4 VXi and not LXi as mentioned in your post(already told by others)

[androdev]

Not to take away any credit for such a nice compilation, but I am not very convinced about the opportunity part. A used car with heavily discounted resale price (such as Vectra) is not exactly an opportunity because there are other costs in the equation which makes it not so attractive to the buyer.

This so-called equation with all costs considered makes every car equally bad or good in a free market. In fact, the selling price is a truly 'discovered' price in used car market. Unlike the price randomly fixed by the manufacturers for new cars.

The only resale opportunity is if some rich friend of yours is disposing off his/her car :-)

[ballkey]

Interestingly, it seems some of these cars are inherently well-maintained; for example, I've never seen a Vectra that doesnt look pristine and scratchless. Same thing for Elantra GTs, few Fiats like Adventure, Optra 1.8 etc.