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Domestically Manufactured or Assembled Luxury Vehicles (CKD) Command Superior Residual Values Compared to Fully Imported Ones (CBU)

There is a sharp difference in residual value curves by production type (CBU and CKD) with CBU vehicles depreciating faster. CBU vehicles retain only 27% of their value in year 5 as compared to CKD vehicles where its 39%. Mercedes C Class Audi A3 and BMW 3 series command superior resale value as compared to the overall segment There is no perceptible difference between residual values of luxury cars basis fuel type (petrol or diesel) or body type (Sedan SUV Coupe) IndianBlueBook (IBB) the industry-first pricing and analytics; platform for new and pre-owned vehicles in India today released its study Residual Value Analysis of the Luxury Car Segment in India - 2017. The study which covers leading luxury car brands includes insights on residual value across factors like fuel type body type and production type. IBB Residual Value Study for Luxury Cars in India 2017 Key Highlights Residual Value Pattern OEM like Mercedes Benz and BMW are able to hold on to their residual values much better as compared to Volvo A combination of local manufacturing superior after sales service network and evolved certified used car programmes is helping Mercedes Benz and BMW command a superior residual value While OEM juggle with a combination of CKD or SKD for the volume drivers and CBU for the lower volume segment Volvo strategy of going for the complete CBU route is reflecting on the lower resale value (25% in Year 5) of their cars in India as compared to the industry average of 35% for CKD luxury vehicles. Factors Driving Residual Value While historically it has been believed that diesel vehicles enjoy a higher preference vis a vis petrol in the luxury segment a series of actions taken by the National Green Tribunal and Supreme Court have driven down the difference between residual values of diesel and petrol cars Similarly body type reflects no perceptible difference in the residual value of vehicles However the study noticed a sharp difference in residual value curves between CBU and CKD vehicles. The general customer perception is that CBU vehicles face the problems of poor availability and higher costs of spare parts. Repairs take longer to complete as well. This perception plays a significant role in driving down residual value of CBU vehicle vis a vis CKD. Residual Value Curve for Entry Level Segment Luxury cars are aspiration and pre-owned luxury cars tend to be preferred over new cars when the price segment is similar - So rather than buying a brand new car customers would jump segments and look for great deals in the used luxury vehicle segment Hence models like Mercedes C Class Audi A3 and BMW 3 series command superior resale value as compared to the overall segment The Report is part of a series of insights from the IndianBlueBook ndash; India first pricing guide for new and used vehicle valuations in India. Indianbluebook.com has access to thousands of used car transactions every month across retail and wholesale channels. The company mines this data on a continuous basis to provide customers information and insight that would enable them to make prudent car buying and selling decisions. Access the Insights online: http://bit.ly/2qe03NS #luxurycars #ibbreport #ibbinsights #ibbresidualvalue About IndianBlueBook The IndianBlueBook (IBB)is the industry first pricing guide for new and pre-owned vehicle valuation in India. With exclusive access to a large number of car transactions that take place every day through different channels IBB derives scientific and insightful inferences that lead to vehicle price discovery. Whether you;re buying or selling a vehicle IBB helps you discover its real worth. Through various transactions on different customer-facing and B2B channels IBB analytical engine logically deduces a pricing index which is then used to derive the benchmark market price of any vehicle. In essence IBB is a one-of-a-kind valuation platform based on rigorous research and pure rationality. It is driven by the sheer passion to demystify the data points of a million transactions thus ensuring that you never overpay or never undersell. IBB offers a wide array of tools such as Total Cost of Ownership (TCO) and residual value analysis regularly updated reviews and insights via its blog and a platform that enables its customers to buy and sell vehicles thereby serving as a one-stop shop for customers looking to research vehicles.