BMW and Mercedes Turn Attention Towards Second-Hand Vehicle Market image

With new vehicle sales going down BMW and Mercedes plan to increase sales of second-hand models.

The German automakers begin to focus on the growing used market as new-car sales continue to go down. BMW and Mercedes will offer fast-track loans and leasing offers to attract new customers for models beyond the reach of many buyers, which will translate in increased competition for the mass-market nameplates.

For used Mercedes-Benz vehicles, “we can make financing decisions in less than 15 minutes and offer very attractive conditions,” said Franz Reiner, head of Daimler’s banking unit. “Used cars offer an entry into the Mercedes-Benz world.”

As new-vehicle sales in Germany are expected to reach the lowest level since 1990 when the country was reunified, automakers have begun to see the second-hand market as a source of profit. Last year leasing deals and loans on pre-owned cars have increased 10% reaching 8 billion euro in Germany, which means that around 6.9 million cars changed hands in 2012, more than double the number of new vehicles.

“Well-preserved used vehicles are the fiercest competitors for new cars,” said Thomas Schiller, an automotive partner at Deloitte in Munich.

Source: Bloomberg