Porsche likely to make a foray into pre-owned car business in India

Luxury sports car maker Porsche is planning to enter pre-owned car business in India in the medium term as it looks to enhance customer base in the country, according to a senior company official.

The company, which sells a range of luxury sports cars and sports utility vehicles (SUVs) such as the 718, 911, Macan and Cayenne priced between Rs 69.98 lakh to Rs 1.63 crore, currently has a total of about 3,500 customers in India.

"We are seriously looking at the pre-owned car business. Our car parc is more than 3,500 cars. It's a sizable number. We are exploring the right format for used car business," Porsche India Director Pavan Shetty told PTI.

Globally, the company sells pre-owned cars under its Porsche Approved brand.

When asked how soon will the company start the pre-owned car vertical, he said, "This is a mid-term plan, it cannot be a long-term plan...We don't have a timeframe right now because there are so many projects going on but we understand the potential of used car business and we should be able to see the light of the day very soon."

Exuding confidence of doing well in the used car business, Shetty said, "We are one of the few brands that offer warranty up to nine years. A nine-year warranty for a car talks about the quality itself. When you have a duty structure (on imported luxury cars) that we have in India, a lot of people would like to realise their aspiration mid-cycle because the quality is great and the car doesn't break down."

He further said the span of warranty that the company offers to its cars gives window for two owners during the period if the first owner decides to upgrade mid-way.

"So, for us, the second one is the foot in the door, who will then automatically graduate to a new car," Shetty said.

When asked about the sales outlook for 2020, he said it is difficult to put a number at the moment but is looking to build on what it achieved in 2019, which was a challenging one for the auto industry.

"In 2018, we did 348 cars and last year was a bit challenging for the auto segment but we ended up with 350 cars. We are quite pleased with what happened last year and we hope to build on the momentum this year... I think 2020 would also be on the lines of 2019," Shetty said.

Porsche is looking at launching sports car Panamera, 10th year edition towards the second quarter this year followed by electric car Taycan towards the end of this year, he said.

Porsche's bet: Rich Indians will show off EVs to boost their street cred

Porsche plans to start selling its electric Taycan model in India next year, in a bet that ultra-rich Indians are willing to splash out as much as $370,000 on an electric car to boost their street cred.

Local duties in India make imported luxury cars about 2.5 times more expensive than what they cost in Europe — a reason cited by Elon Musk for ignoring the market so far — but that’s no deterrent for prospective buyers, accordion to Pavan Shetty, director at Porsche India.

The Taycan “will open up a completely new segment of customers, who are not only sport-car owners, but people who are sport-car owners and also want to be clean and environmentally friendly,” Shetty said in an interview in New Dehli. “We all want to be responsible, but it’s more prevalent in the rich because they have an option and the resources.”

India churned out millionaires at the fastest pace in Asia in 2017, according to a Capgemini SE report released last year, but its economy has slowed since then, hitting everything from the purchase of cars to consumption of cookies. Auto sales in India — where cleaner vehicles have yet to make a dent on the industry — extended their longest-ever losing streak in November, falling for 13 consecutive months, although new sport-utility vehicles still surged.

Porsche, which sells 350-450 cars a year in India, is looking for a boost to those figures when it launches its new Cayenne Coupe on Friday, followed by the Taycan by July. It unveiled the latter in China, Germany and Niagara Falls in September, with a starting price outside India of $150,900 and a potential base version costing below $100,000. That underscores the model’s central role in parent Volkswagen AG‘s push to become a leader in battery-powered vehicles.

Musk, the billionaire founder of Tesla Inc, has in the past cited challenging government regulations as a hurdle in India, and is holding out for a temporary waiver on import penalties and other restrictions before agreeing to build a local plant. Musk said in March he would “love to be” in India this year or next, but a firm plan has yet to be announced.

“That is Elon Musk’s problem,” Shetty said. “We are not a blind volume chaser. You can’t change the laws of the land. The question is do you want to do business or do you not want to do business. I want to do business.”

Iconic British brand MG Motor, now owned by Chinese giant SAIC Motor Corp, and South Korea’s Hyundai Motor Co are the only international carmakers that currently sell electric vehicles in India, where the best-selling gas guzzler costs just $4,000, still double what an average Indian earns in a year.

“I strongly believe that luxury adopts technology much faster than general automobiles,” Shetty said. “We’re entering a phase where the rich are necessarily global citizens. If you own a Porsche, you don’t need an introduction. You’re already someone, it becomes your identity.”