The intense relationship that the community shares with its cars explains the premium they command in the second-hand market
By Lhendup G Bhutia | OPEN
In 1970, an American economist named George Akerlof published a paper on information asymmetry. Titled ‘The Market for Lemons: Quality Uncertainty and the Market Mechanism’, it examined the market impact of a situation in which one party has more or better information than the other during a transaction.
To illustrate such a scenario, Akerlof turned to the market for used cars. In such a market, a seller has all the relevant information on the true quality of the car s/he wants to sell, while the buyer has none. Unaware of how well the car has been maintained, whether it has had hard knocks and bears hidden problems, and thus afraid he might get ripped off, the buyer will pay less than what a truly high-quality car deserves. Average prices tend to rule, so dud ‘lemons’ are sold for what they’re worth or more, while good ‘peach’ cars are cheated of a fair resale price. If this is the case, then good cars will simply not find their way to the used car market, since their sellers cannot get a good deal. And so all the cars on sale would be duds. Assymetric information, Akerlof argued, could result in a market failure. His work won him the Nobel Prize for Economics in 2001.
However, on the other side of the globe, Mumbai’s tiny Parsi community has been defying Akerlof’s theory for decades. The used car market in India likely has more lemons than peaches, buyers remain equally blind while making a choice, but one type of used vehicle fetches a premium over all others—one owned and maintained by a Parsi.
Here in the city, newspaper classifieds for used cars often state ‘Parsi-owned’ upfront, a mention almost always made ahead of the brand name and model of the vehicle. And popular internet portals like Quickr and OLX have reams of web pages with used cars on sale that highlight how they are ‘Parsi-owned’, how they are in ‘immaculate condition’ and how they are looking for ‘an owner to take care of their car’. A glance at these portals even reveals used cars that were once owned by a Parsi, have changed several other hands since and yet flaunt their ‘Parsi-owned’ label.
It all points to the extraordinary demand for cars owned by Parsis. While most vehicles collect dust for weeks before a buyer is found, these get sold within days of going on sale. Just what makes Parsi car ownership so special?
Freddie Turel, a Parsi well known for his passion of collecting cars, lifts his large right arm in the air, points his index finger to his head and proceeds to unscrew an imaginary screw in his head. “Because,” he says by way of explanation, “we [Parsis] are mad about our cars.”
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Often noticed for their eccentricities, Parsis love their cars so much, it’s hard to exaggerate the phenomenon. Some say it goes with a manic need for orderliness, and the care they take of their automobiles has found portrayal in several commercials and Hindi films over the years. It all adds up to a higher sticker price.
Ayaaz Fazulbhoy, director of one of Mumbai’s largest and oldest used car dealers, the 1956-established Fazulbhoys Motors, says that every Parsi-owned vehicle brought to his dealership for sale undergoes a different valuation process. He claims that a vehicle owned by a Parsi commands about 20 per cent more money than an equally well kept non-Parsi-owned vehicle of the same make, model and age. “When buyers come, they want to see the vehicles first,” says Fazulbhoy, “When they zero in on a car, after looking at its condition and checking their budgets, they start inquiring about its past owners. Some even ask, ‘Is it Parsi owned?’”
Apart from such cars, according to Fazulbhoy, vehicles owned by doctors also fetch an equally good price. According to another used car dealer, Saeed Rafique, manager of Evershine Motors in Andheri, people by nature are wary of the condition of used cars no matter what dealers say of their road fitness. “In our world, there are no guarantees of quality or a warranty period,” he says, “There is just the word of a dealer or seller. Trust, here, becomes crucial. People are willing to pay more for a vehicle owned by a Parsi or doctor because people of these two communities are thought to be trustworthy and careful.”
But is all this just imagery? Popular culture has long celebrated the image of a Parsi gentleman polishing an already polished car, burying his head under a car’s hood to sniff out the faintest of noises, or swearing at others for failing to maintain road etiquette. Is it just another social stereotype?
On an earlier occasion, speaking over the phone, Turel had made the priority that Parsis accord their cars clear. “You see,” he had loudly declared, “we love our cars more than our wives.” This was before he dropped his voice to a whisper, “She is listening.” He elaborated on the theme a few days later at his Dadar residence. “It is like the case of the wife and the mistress. We marry our wives, but it is really the mistress we care for.”
Turel is popular among automobile enthusiasts in Mumbai. He collects vehicles, especially older cars, holds the position of vice-president of the Mercedes-Benz Club India, and at any given time, has at least a dozen vehicles in his possession. Just as he took over and expanded the dental care equipment business that his father set up, he has also inherited and expanded his father’s passion for automobiles. In his time, his father owned a Pontiac Firebird, Peugeot 404 and a 1974 Fiat. As a boy, Freddie was not allowed to touch any of them, and some of his fondest memories are of older days when he was allowed to drive the cars to refuel. He would drive the car in need of fuel all the way from their home in Dadar to a filling station in Worli, and not any of the nearby ones because the owner of the Worli station was a Parsi, acquainted with the family, and thus trustworthy.
Turel often purchases neglected old cars, brings them up to scratch, and sells them when he wants to buy another. More often than not, he gets a higher value for these than what he bought them for. For instance, in the late 1970s, he got about Rs 4 lakh for a Mercedes sedan a few years after he bought it for Rs 3 lakh and spent a few thousand to refurbish it. “I know there are many who eye my cars,” he says, “but they don’t dare ask if I want to sell them.”
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Many Parsis, it appears, take a quirky approach to car maintenance. Captain RH Buhariwala, a former pilot in the armed forces who works with the Maharashtra government, never allows anyone else into the driver’s seat of his Ford Fiesta. Nor has he ever employed a driver, who, he fears, might ruin his car. He gets his vehicle washed, cleaned and vacuumed religiously every day, even if it hasn’t been driven, and never with a shampoo or detergent, afraid that it might contain chemicals that will corrode its paint. He does not allow any eatable in his car, a rule he does not relax even for his two school- going daughters.
Turel avoids visiting restaurants that have a valet service to park his car. If he cannot escape a valet, he asks the fellow to sit with him and show him the parking spot (and tips him anyway).
Captain Buhariwala has just listed his Fiesta for sale on OLX with a headline saying ‘Parsi owned car for sale’. When I turn up to meet him a little before noon in a spacious Parsi neighbourhood in Bandra, I find him inspecting his maroon car, already washed this morning, with a sponge in hand. Around him, old Parsi gentlemen circumambulate their cars under a hot sun, checking for faults to busy themselves with for the rest of the day, even as their wives seem to roll their eyes sitting in the cool shade.
“See,” says Captain Buhariwala, opening his car’s doors, “This is how you know whether a car has ever undergone an accident.” He is referring to that part of the vehicle where the doors meet the rest of the frame. Smash-ups are often masked by having the exterior reworked, he says, but these points reveal the damage.
Captain Buhariwala’s vehicle is over four years old and has been driven for 31,000 km. When he approached a dealer, he was offered only Rs 1.5 lakh for it. Confident that he could get a better price, he went online with his sale notice. His asking price: Rs 3 lakh. He admits that the same model of the same age and mileage used by anyone else would sell for just about Rs 2.5 lakh. “I have sold two other cars in the past too (a Fiat and an Indica),” he says, “and I’ve always got the quoted price.” Earlier, he would put up a notice with the sign ‘Parsi-owned car on sale’ on his housing society’s noticeboard and someone would show up with an offer within days. Online, so far, since he put up his notice two weeks ago, he has gotten around 30 inquiries. Some would-be buyers have even come home to see his Fiesta. He plans to sell it towards the end of the month and buy a new Mahindra SUV.
As I leave, he tells an unusual story of an old neighbour who owns an old Norton bike. This individual apparently parks the motorcycle in his bedroom.
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Among other things, Parsis are notorious for their short temper and suspicious nature. It makes for unusual conversation. A Parsi owner of a Hyundai Verna in ‘immaculate condition’ has sold his 2008 car for Rs 4.1 lakh within two days of putting up an ad on Quickr. His wife informs me over the phone that he is out on an evening walk. Five minutes later, a gentleman who refuses to part with his name, no doubt the owner himself, comes on the line to say that both the owner and his wife have left the country.
Another Parsi who has his Tata Nano for sale online with the line, ‘Seeking buyer who will take care of my most prized possession’, refuses to talk about why he is selling his car.
“Why are you selling your car?”
“My wish.”
“Yes, but can you tell me a little so that I can write about it?”
“It is too personal to talk about.”
“Perhaps you can tell me if it’s true that Parsis get a good rate for their cars?”
“Are you well-versed in automobiles?”
“Not really. I was just curious about this…”
“Then it’s pointless. You won’t understand.”
The phone line goes dead.
Another Parsi, who deals in second-hand cars and also frequently buys and sells vehicles for personal use, wants the interview conducted at the doorstep of his house. After verifying my credentials, he reluctantly lets me in, but is unwilling to spend more than five minutes in conversation, despite having confirmed the appointment. He wants to sell a Honda City that he has used since 2010 for Rs 6 lakh, he says, even though he knows most decently-maintained cars of that model would fetch only Rs 5 to 5.6 lakh. He oscillates his gaze between me and his watch and I realise there’s nothing more he has to say. What he has said, it seems, is already sensitive enough. As I begin to leave, he says, “Please, please be careful how you quote me.”
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According to Turel, many Parsis have motives beyond money when they sell their cars. “We often also want someone who will equally love it.” In 1990, he was moved to see the condition of a 1947 Rolls Royce. It had once belonged to the Maharaja of Mysore. But when he came across it, it had been lying forlorn in a garage for 11 years. He bought the vehicle for a large sum, an amount he refuses to disclose, and spent an even larger sum getting it into shape. The sum of money he put in was burning a hole in his pocket and he had to sell it eventually. A well-known industrialist in Mumbai sent his nephew to strike a deal for the vehicle. The industrialist agreed on a sum but cancelled a number of meetings with Turel. Eventually, he asked Turel to drive the vehicle to his Juhu bungalow. Convinced that the industrialist had little respect for him, and hence would not care for the car either, Turel sold the Rolls Royce to someone else who offered less but appeared to appreciate it more.
Turel does not allow anyone but himself to drive his cars. It is a rule he’s adopted from his father. But several years ago, he found himself unable to turn down an acquaintance. This individual, now one of India’s wealthiest men, was then a relatively unknown youngster. “Like most Gujarati men—a terrible and rough driver,” he says of the experience of sitting in the passenger seat of his Fiat while this man drove the car. A few months later, the man spotted Turel while he was driving the car on Marine Drive. He shouted out for Freddie, but Freddie sped on with just a wave, afraid that he would ask for his car.
When I ask if I may mention the industrialist’s name, Turel says, “Please don’t. How will (insert name here) feel?”