ET: Luxury cars at throwaway prices! article on pre-owned luxury car business

[aditya101]

Hi, something interesting in the newspaper:

Luxury cars at throwaway prices!- Companies-The Sunday ET-Features-The Economic Times

Luxury cars at throwaway prices!
7 Jun 2009, 2051 hrs IST, John Sarkar, ET Bureau

NEW DELHI: These love affairs don't last long. They usually fizzle out after 10,000 km or so. Heartbeats drop, the once gorgeous curves lose their
charm and familiarity sets in with the predictable climax of a celebrity fling.

So, if you ever thought of spending the rest of your life with your dream car, think again.

Whether it's Italian, German, Brit or Japanese - an exotic pedigree doesn't guarantee fidelity. Ask luxury car owners. With a rising number of jilted lovers putting their prized wheels on the block, the Indian pre-owned luxury car market has become the equivalent of a connoisseur's flea bazaar, with Rolls Royces, Bentleys, Ferraris, Porsches and BMWs jostling for attention at throwaway prices.

"It's not difficult to find almost a brand new luxury cars at half its original price," says Shyam Mohan Sharma, the owner of Vintage Cars and a well-connected agent for pre-owned luxury cars in the Capital. "Top industrialists such as the Singhanias, the Modis and the Mittals know me very well," he claims and further goes on to add that these blue-ribbon families replace their cars at will.

At present, this broker who has more than 16 years of experience in this business, has a 2006 Bentley Flying Spur that has done only 10,000 km for Rs 1.2 cr, a 2009 BMW 730LD which has 3000 km on its odo for Rs 60 lakh, a 2006 Porsche Carrera which has done 15,000 km for Rs 65 lakh and a one year old Ferrari 430 for Rs 2 cr.

"Ours is a business which thrives on contacts," says Sharma. "Most of these cars belong to people who want to upgrade to a new car. They ask me to look for buyers and I charge a commission for it." Till date, Sharma's prized deal was a 2008 Rs 4.1 cr Royce that had done 4000 km. In the end, he managed to sell it for Rs 3 crore. Brokers such as Sharma usually earn a commission of about 2% per deal - 1% from the buyer and 1% from the seller.

It also depends on the relationship that the broker shares with his clients. "The commission can range between 0.5% and 2%," pointed out another Delhi-based pre-owned luxury car agent who did not wish to be identified. So, for a deal of 50 lakh, agents can pocket a neat Rs 1 lakh. On an average, these middlemen sell about 10 cars per month.

According to these agents, at present, Mercs seem to be the flavour of the season. "Pre-owned car buyers look for a good discount," explained another Delhi-based broker on the condition of anonymity. "In December last year, Mercedes-Benz was offering a discount of around Rs 12 lakh on the E-Class. Around 1200 cars were sold in this region alone. So, when these cars come into the pre-owned market they do so at a much lower offer price."

But other than good discounts on Mercs, this broker also has a number of other tempting offers that are worth mentioning. A 2008 jade green Porsche Cayenne V6 is going for Rs 60 lakh, a 2008 BMW X5 diesel is being offered for Rs 48 lakh and a black Porsche Boxster S, which has only done 9000 km, is being sold for Rs 40 lakh. And if this wasn't enough there is still some more good news for wannabe lovers. These lovely cars also come with a finance option!

[Latheesh]

Throwaway prices!! their throwaway prices are in millions and crores!!

I need some water..!!

[passion4cars]

Originally Posted by Latheesh

Throwaway prices!! their throwaway prices are in millions and crores!!

I need some water..!!

i like this , he really thought throwaway prices

[shelleve]

Nice article - I thought I knew Shyam pretty well, but I did not know he was into the luxury segment. Some of his cars are parked around my office area and a gas pump close by. These are mostly limited to Mercs and Lexus.

[speedy]

Humbug i would say. Shyam Sharma does sell cars but half his talks are rubbish. The only thing he is good at is to impress someone with names and pictures of cars. He had once tried to sell me my own Caddy and ended up getting a mouthfull. The prices mentioned are on the higher side and if you look for the cars yourself you would get them cheaper. The price quoted to me for the Rolls in Delhi was 3 crores and the car is still up for sale, and here he mentions the asking was 4.1 and he sold it for 3. A BMW x5 from the showroom would be better at 55/58 lakhs than getting a 2008 for 48 lakhs. The boxster s was offered at 35 lakhs with the indication that the price could be negotiated and here he offers it at 40 lakhs. This is what happens when the press get involved and do arcticles on dealers, they suddenly feel they are the only ones and the prices get jacked up.

[mlcarrera]

Wonder why they are quoting 1 cr for a used 911 turbo..when 2 year old bentley gt s are going for that much

[speedy]

Originally Posted by mlcarrera

Wonder why they are quoting 1 cr for a used 911 turbo..when 2 year old bentley gt s are going for that much

Hmm... Mlcarrera the bombay showroom was asking 1.25 Cr for a used Turbo. The dealer of course would see these prices and jack up the price of the car. I agree a GTS of 06/07 would go for 1 cr but when it reaches the hands of a dealer/broker he would ask for more as his cut is in it too.

[Dante]

Originally Posted by speedy

Hmm... Mlcarrera the bombay showroom was asking 1.25 Cr for a used Turbo. The dealer of course would see these prices and jack up the price of the car. I agree a GTS of 06/07 would go for 1 cr but when it reaches the hands of a dealer/broker he would ask for more as his cut is in it too.

@ speedy is this a black colored 911 turbo for sale you are talking about?
Coz when i had been to the showroom a couple of months ago there was a black 911 turbo.

[GTO]

They are talking about 1 - 2 year old exotics, wait till you see the prices when they are 4 - 5 years of age! I've seen some mouth-watering deals. 3 year old M3 for low 30's, 4 year old 911 for high 30's, 3 month old A4 3.2 FSI for 32...the list is endless. Depreciation is a petrol-head's best friend (when he is the one shopping, of course ). I am FLOORED by the value in the "pre-worshipped" market.

P.S. : The article seems to be more of an advertorial for Shyam Sharma's services.

[krazyking]

I feel that the BMW 730LD for 60 lacks, the Bentley for 1.2 and the black Porsche Boxter S aren't bad deals. It could possibly be even cheaper than quoted as speedy mentioned.

[loving_alaap]

who will sell a Rolls Royce with just 4K on the ODO?

What will be the upgrade than?

[krazyking]

Originally Posted by loving_alaap

who will sell a Rolls Royce with just 4K on the ODO?

What will be the upgrade than?

Haha I'm guessing a Mayabach?

[samyakmodi]

somehow i have noticed that the expensive cars actually lose close to 50% in three years in the resale market.

[speedy]

Originally Posted by Dante

@ speedy is this a black colored 911 turbo for sale you are talking about?
Coz when i had been to the showroom a couple of months ago there was a black 911 turbo.

Yes it is the same one. The car i believe is now sold.

Originally Posted by GTO

They are talking about 1 - 2 year old exotics, wait till you see the prices when they are 4 - 5 years of age! I've seen some mouth-watering deals. 3 year old M3 for low 30's, 4 year old 911 for high 30's, 3 month old A4 3.2 FSI for 32...the list is endless. Depreciation is a petrol-head's best friend (when he is the one shopping, of course ). I am FLOORED by the value in the "pre-worshipped" market.

P.S. : The article seems to be more of an advertorial for Shyam Sharma's services.

I agree with you completely GTO. I was offered a 97/98 911 for 20 lakhs. My cousin had picked up his 2003 M3 convertible for around 24 lakhs.

It is a Shyam Sharma article more than anything else.

Originally Posted by loving_alaap

who will sell a Rolls Royce with just 4K on the ODO?

What will be the upgrade than?

I was informed the owner was going through a cash crunch and hence the sale. I dont think there would be any upgrade but more like use what else is there at home.

[esteem_lover]

Originally Posted by loving_alaap

who will sell a Rolls Royce with just 4K on the ODO?

What will be the upgrade than?

A helicopter or a private jet with the rolls engine.