Pre-owned car market will continue to grow at a steady pace of 15% till 2018: Jatin Ahuja of Big Boy Toyz
Jatin Ahuja, Founder & Managing Director, Big Boy Toyz, the biggest player in the pre-owned luxury car brands like Maserati, Ferrari and Mercedes-Benz talks to Chanchal Pal Chauhan about the impact on GST taxes on the segment and discusses how demand for marquee badges like Porsche or even Lamborghini now originates from smaller cities & town.
Here are edited excerpts from the interview.
BT: How has been the growth of luxury car segment in India?
Jatin: The exotic luxury car segment is still at a nascent stage in the evolving Indian market. The pre-owned luxury car industry registered growth of about 20 per cent in 2015, and further touched 25 per cent in the year 2016. With recent changes in the tax regime, sales figures of luxury cars will be initially impacted, but we are anticipating growth to pick up in the next few quarters. We have also seen a growing demand of exotic luxury cars not only from metros but also from tier II and III markets.
BT: Which markets are driving the growth of luxury cars in India?
Jatin: We have registered steady growth from Delhi, Mumbai and Bangalore. The rise of new age entrepreneurs has lead to sharp uptick in demand from Southern market. We have registered highest growth from Hyderabad and Chennai in the last quarter. We have also noticed strong demand coming from Pune, Indore, Kochi and Guwahati.
BT: Do you plan to expand business in other centres?
Jatin: Big Boy Toyz is based out of Gurgaon and Delhi, but our network presence is across India. To further strengthen our business objective we plan to expand in Western and Southern market with launch of stores in Mumbai and Hyderabad respectively.
BT: What is the company's current revenue and growth perspective?
Jatin: Having started the Business in 2010, the company has witnessed a rock solid annual growth rate of over 40 per cent. Currently, BBT is averaging on 30 cars per month and has an annual turnover of about Rs 200 crore. With focused approach on target customers, we plan to reach the turnover of Rs 1000 crore in the next three years.
BT: Views on impact of GST on pre-owned luxury car segment?
Jatin: With government setting up new tax rates under GST, Big Boy Toyz has directly been hit with regard to sales of luxury cars as all its models fall under the highest tax bracket. Under the new tax regime, business viability has been hugely impacted. We believe that such measures will discourage consumer sentiment and further impact the growth of organised players.
BT: What kind of growth is expected in the organised pre-owned car segment in coming years?
Jatin: India's used car segment has had a relatively stable growth. The pre-owned car market will continue to grow at a steady pace of 15 per cent by 2018. With organised players bringing in credibility and consumer confidence we are expecting to grow at an exponential rate. Also, there is a growing societal acceptance of people buying used cars.