Strong residuals a key factor that prompts customers to upgrade to a new car.
17 Jan 2024 | 3252 Views | By Autocar Professional Bureau
The supercar industry has lately been booming in India, with carmakers like Porsche and Lamborghini registering record domestic sales over the last couple of years. Buying sentiment has been at an all-time high in the two years since the pandemic, and Lalit Choudary, Executive Chairman at Infinity Cars — retailer ...
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The supercar industry has lately been booming in India, with carmakers like Porsche and Lamborghini registering record domestic sales over the last couple of years. Buying sentiment has been at an all-time high in the two years since the pandemic, and Lalit Choudary, Executive Chairman at Infinity Cars — retailer of Lamborghinis, McLarens, and Rolls Royces in India — tells our sister publication, Autocar India, that the hardening of the residual value of supercars has been an “an extremely important” factor driving growth in this segment.
Despite the sky-high price tags that supercars come with in India, there’s a thriving appetite for them. With limited-edition allocations selling out like hotcakes, and carmakers boasting waiting periods in years, supercar makers have taken notice of this growing interest in India.
In the larger context, supercars are still a rarity, as Choudary explains: “India’s wealth and consumption are not proportionate for this segment. We’re probably some ways away from catching up with the rest of the world.”
However, with such exclusivity comes a hardening of the residual value, something that supercars have typically not been able to counteract in markets abroad. This, in turn, makes it one of the key drivers of the segment’s growth.
“Most people buy these cars believing they should be able to trade them at will and upgrade to the next car. So, as participants in the business, it’s our primary job to stand by them when they want to push their car out and purchase something else. It’s our job to ensure that the buyback value holds and minimise the loss to the first buyer,” Choudary asserts.
Early buyers putting their cars up for sale in the pre-owned market then proliferates another crop of buyers in this segment. Given that purchasing such cars new, especially at the price they come at, is out of reach for most, the used-car market also becomes a lucrative platform for aspiring buyers.
With such demand, it’s very much a sellers’ market. Take, for instance, the newly launched Lamborghini Revuelto, priced at well above Rs 10 crore (on road). Its allocations for India are already sold out till 2026. Clearly, discerning buyers aren’t shying away from the escalating prices, which Choudary believes comes with good reason.
“Price increases have happened with currency and cost of production going the other way, but they are justifiably slow. Covid and its related supply chain constraints also contributed. So net-net, it’s with good reason, similar to how prices have increased for most product categories. But when there’s value at that price, consumers make the purchase,” Choudary says.