[sramanat]

Great interview!
Couple of follow up questions (if you can put them across to him).
1. Ratios/Comparables - which other businesses (India or international) does he compare his numbers to? Depending on how much of the 25% buyback happens, this is probably closer to a leasing business than a dealership business.
2. On GST - Given that cars stay with BBT for 10-12 days, would it help if he ran a marketplace instead of dealership and facilitate ownership transfer? The GST savings can be split 3 ways - between the buyer, seller and BBT.

I kind of know the answer for question 2. His customers are probably insensitive to the marginal savings. But I still think it should be considered purely on principle

[GTO]

Originally Posted by SmartCat

This is a stunning revelation:

- 7 series is easier than to sell than 3 series.

Another luxury car dealer echoes the thought. He is a Mercedes dealer and told me that the S-Class customer takes a quicker decision than the C-Class customer, requires fewer test-drives, asks lesser questions and is less fussy. I guess because the C-Class owner is usually buying a luxury car for the first time, while the S-Class customer might already own a couple of luxury cars.

Originally Posted by CrAzY dRiVeR

I'd still like to read a Pratap Bose interview though!

Done! Will add to the que. My only apprehension with interviewing corporate managers is that the responses will be filtered 10 times by their PR / communications department.

[Turbanator]

Originally Posted by GTO

Another luxury car dealer echoes the thought. He is a Mercedes dealer and told me that the S-Class customer takes a quicker decision than the C-Class.

It’s a fact. Occasionally, I have to be part of process of buying a luxury car for a friend or an extended member of family, and the kind of questions they ask! Even the replies of Sales advisors. These is completely opposite of someone who buys regularly or in higher segment. Only very specific questions or concerns are raised by repeating customers and deals are normally handled directly by the General manager or the owner depending on your relationship.

Not the cheapest always but it works well for both. Not much negotiations required too as both have sort of trust. Paying advance or full or after delivery is not uncommon based on comfort level. Most of the premium cars, we have bought in the past, finance cheques and even down payments were made post deliveries since our signatories are from another town.

This happens with Germans only as they bill cars to dealerships on credit. Dealers have to pay before generating Form 22 or within certain days from time of billing depending on the model. With Japanese, there no credit. Dealers have to pay before dispatch, especially with Toyota. Zero or maybe few credit days to cover transit.

[no_fear]

Originally Posted by GTO

I guess because the C-Class owner is usually buying a luxury car for the first time, while the S-Class customer might already own a couple of luxury cars.

+1 on this observation.

C Class owners are more often at the lower rungs of the wealth ladder and tend to be scrupulous of how they spend their money and the return, while also wanting the prestige and glory.

S class owners are wealthy and frankly don't care. Customers of this wealth bracket will not haggle over pricing and inclusion of free servicing and plastic mats.

Helping a friend purchase an C Class at the moment, and the non stop questions he asks about mileage, service intervals, freebies, after sales support irritates me. It's been 3 months and he still hasn't made up his mind.

Met a hotelier a year ago, who rocked into the Merc showroom and bought an S Class on a whim. Spent a grand total of 10 minutes in the showroom.

[maddy42]

Great interview and there are some very surprising comments. The topic of why india does not have many luxury car dealerships made me look at our countries different wealth brackets and mind you the number is astounding.

More than 92% of the population have a networth of less than 7 lac. This puts the market of users who can afford the luxury cars in single digits and that changes everything! China on the other hand has 63% of the population in this bracket.



One query to the bhpians. In a family of 4, will this chart mean the assets get split 4 ways?

Originally Posted by no_fear

+1 on this observation.

Helping a friend purchase an C Class at the moment, and the non stop questions he asks about mileage, service intervals, freebies, after sales support irritates me. It's been 3 months and he still hasn't made up his mind.

+1 to this. If your looking at a used car please be mindful of the fact that anything which occurs to the car can be pointed back as your fault. Had a friend who bought a car 6 year ago contact me to tell she found some details on the car having been a salvage title! Mind you this car is still drivable. I was just helping out and am no dealer.

Maddy

[woodstock3001]

I'm loving this series. Thank you to everyone who has made it possible.

This is such a good read for any petrol head or eyes that droll over cars.

Though i do not have any list of people I want to read next , however there's just 1 person that comes to my mind as of now - Anand Mahindra, but rightly said by GTO that interviewing corporate managers would mean everything is not candid & toned down by their PR Managers, so I'll wait for next one & continue to read whoever comes next.

Keep it cominggggggg (Sorry did this purposely in excitement

[Fiestaboy]

Lovely thread.

Gives lot of info about running (high end) used cars dealership.

The dealer where i bought my New Fiesta has more similarity to Big Boy Toyz, but located down South in Chennai.
(Taking pristine cars with less odo alone, fully bought by them, clear photos in their own site, cars - not older than 4-5 years, 1st owner & handling registration in all parts of the state etc.)

I am pretty much impressed as how this part of business is getting into organized sector than it was before 5 or 10 years ago. If they do a good work, word of mouth itself will fetch them more sales & thereby more profits.

I myself got 3 New Fiesta's & 1 Ecosport sales to the said dealer & till now all are happy with their cars.

[professor.march]

Lovely interview and a great series. I remember the days when overdrive magazine used to come with a poster of usually a supercar in the center spread. Spent many childhood hours reading them cover to cover. These cars are like dreams for many of us and I appreciate their statement about encouraging general public to walk into their showroom.

So I do have a suggestion about the interview series. What if all the interviews are linked under a separate subdirectory so that they are easy to find? It will also be good to see more interviews being conducted with various people in the automotive industry, including component makers. Just to give a behind the scenes look at many of the secret players.

[d3mon]

Originally Posted by SmartCat

Inventory turnover ratio is just 10 to 12 days.

Hmm. Does the math check out?

They say they do 350-400 car sales in 1 year. And as per their website, they currently have ~60 cars in stock. That translates to a holding period of about 55-60 days.

Originally Posted by Turbanator

All this time, you will probably have to keep the car in the name of the original owner (most likely, as heard from knowns). Everybody is happy, Car stays as first or second owner despite multiple ownerships. Have seen some cars that come back much earlier, like the blue 911, BBT got from Jaipur, sold and then it came back after few months, sold to another guy.

It's extremely sad to see that arguably the biggest brand in luxury used car market is also indulging these cheap tricks. I feel it'd be better to buy from an individual than BBT. But then again, I'm a fussy 3 series buyer, not their target clientele anyway

[V.Narayan]

I guess as always it will be different strokes for different folks. The thing about many (financially) prospective customers is that they don't want to be seen in a car that's too flashy or too opulent. Each such buyer carries an image of himself/herself in the mind and in this image at a point of opulence the balance tips over and one says, nope that's not the image I wish to project. And of course there are many who want that image too. This tipping point applies not only to cars but to homes, farm houses, etc. But then to each his own.

I can totally relate to his statement that a 7-series buyer is simpler to deal with than a 3-series one. The 7-series buyer has been there done that and is probably spending a smaller fraction of his annual income on the car than the 3-series buyer and is thus shouldering a lower risk.

[SmartCat]

Originally Posted by V.Narayan

I can totally relate to his statement that a 7-series buyer is simpler to deal with than a 3-series one. The 7-series buyer has been there done that and is probably spending a smaller fraction of his annual income on the car than the 3-series buyer and is thus shouldering a lower risk.

I always assumed that buying pre-owned cars is taboo for those who want to own S Class/A8/7 series. Even among peasants like us, only 28% would consider buying pre-owned (see poll results)
https://www.team-bhp.com/forum/india...-used-car.html (So, why won't you buy a used car?)

And that somebody who can afford Rs. 75L (pre-owned S Class, last gen) can easily afford Rs. 1.25 Cr (new S Class, current gen).

[giri1.8]

Originally Posted by SmartCat

I always assumed that buying pre-owned cars is taboo for those who want to own S Class/A8/7 series.

For people who are poor according to their IT returns and rich by liquid cash, used exotics are the way to go, they can enjoy the finest things in life while flying under the rador.

BBT probably is more flexible in offering loans to individuals than banks.

[ajmat]

Some points to consider

• BBT seems to acquire all its stock so it is very capital intensive
• The high-end used market is very limited in actual buyers - most people suffer from the "virginity" complex, in that it must be new and they are the first - hence the depreciation on these machines
• High end purchases are linked to your PAN number
• A significant number of the target buyers want to share their joy with their loved ones but not the tax man
• Capital intensive businesses are forced to be flexible in unconventional ways.
• Being capital intensive, committing to refunds or buy back for cash is suicidal.

Unless the population becomes tax compliant, arbitrage will happen

[Rehaan]

Note from Moderator:

Posts regarding the recent DRI luxury car bust have been consolidated from this thread and 2 others threads into a standalone discussion here.

[Sahil]

Apparently, BBT has a fixed price with no bargaining room. This is unusual for a used car dealer. Even new car dealers have to resort to some amount of haggling as we all know. I have interacted with Jatin and his team in the past and they seem pretty stuck up on the pricing. But if this was true then how do 5% of their cars end up in a loss!?

Do we have BHPians who have bought cars from BBT? Would be great to hear their experience and pricing negotiation if any.