According to IHS Automotive, luxury vehicle sales in 2015 marked a growth of 6.4% year on year (y/y) from 32,000 units sold in 2014.
As a result, many high end luxury brands like Mercedes, Maserati, Bugatti and BMW etc, have set up shop in almost every city of India. The increased demand for luxury cars show that the Indian consumer is willing to spend a lot of money on driving class. The triple star German automobile brand, Mercedes has become the top player in the India luxury car industry, followed by Audi, BMW and the Jaguar and Land Rover brands owned by Tata Motors. (IHS Automative, n.d.)
Past VS Present
Even a few years back, luxury was a concept frowned upon in a socialist driven economy like our country’s. Indulgence and extravagance were usually looked down on and definitely, never encouraged! However, things are vastly different now. With the expanding power of the Indian consumer, indulgence and extravagance are the two things being advertised the most. The result is that the luxury segment of everything, from automobiles to clothing and accessories, has become a huge attraction. It’s not just a demand from the celebrities and the ultra rich, but the growing middle class with increased consumption power too. With the growing IT industry in India, young achievers in the country want to stand apart from the crowd with a taste for luxury and class.
So far, the market has been entirely led by Mercedes-Benz India which won the lead position from Audi with their hugely popular S-Class and C-Class range of cars. Trying to make the most of this surge in demand, all major luxury brands have come out with new launches to attract consumers and give them more variety to choose from. This is seen in the fact that of more than 50 new launches, more than 40 were contributions by Mercedes-Benz, BMW and Audi. This number includes both new models as well as variants of existing models.
The Way Forward
Key players such as Italian sports car manufacturer Lamborghini have car showrooms in Bangalore and Delhi NCR only. But that is soon set to change. To meet the demand, there are a number of car showrooms in Bangalore, Mumbai, Delhi, Chennai and even other non-metropolitan cities. Previously, luxury car showrooms were located only in major metropolises but in an effort to meet the increasing demand, showrooms can sometimes be found even in smaller cities of India. This enhancement of the dealer network beyond metropolitan areas has contributed majorly to the increase in sales.
With the year almost coming to an end, the growth of the market for luxury cars in India seems to be ending on a high note. The market is expected to show the same positive rise next year as well inspite of changes in tax duties and other charges raised by the Government of India.