Growth of luxury car market in India speeds up
The Indian market for luxury cars is fast maturing. It’s therefore no surprise that all the luxury car brands worldwide are now keenly looking at the Indian market.
Between April 2010 and April 2011, almost all the luxury carmakers in India have announced new models, and new brands like Maserati, Ferrari and Aston Martin have also set up dealerships in India.
If we take a look at the luxury car market in India, that is cars priced above Rs. 20 lakhs, one can see a healthy growth trend among big name brands, but some have foundered.
India’s obsession with the three-pointer star, the Mercedes Benz, is still quite strong, though the other German carmaker, BMW, is at a par and has even sold a few more cars in some segments compared to Mercedes Benz in the last financial year. For instance, BMW sold 2,901 5-Series sedans against Mercedes’ 2,437 E-Class cars. But in the entry-level luxury segment, the C-Class sold a few more than BMW’s 3 series.
What’s interesting to note among the sales of luxury car brands in India, is the widening base. Audi has been a strong player last year, with all segments of its cars eating into Mercedes and BMW’s market share. The A4 and the A6 models of Audi are quickly gaining sales, and are chalking up huge numbers in percentage growth being late entrants.
In the entry-level luxury segment, the Skoda Superb continues to provide immense value for money as far as the car goes, as can be seen in the sales figures. Skoda sold 4,164 Superbs last year. This year, the new Volkswagen Passat is likely to give its cousin Superb a run for its money in the same price segment.
While almost all luxury brands have show healthy growth, the Japanese haven’t been doing too well. The Toyota Camry clocked a meager 558 unit in sales, though it has grown more than 50 percent from the previous year. In fact, BMW managed to sell almost the same number of 7-Series sedans, and these are cars that cost nearly three times as much as a Camry. The Honda Accord, however, has shown a decline in sales over the year, dropping nearly 12 percent, to 2,446 cars. The availability of seemingly more prestigious brands in the same price range is partly the reason for this drop. Another Japanese brand, the Nissan Teana too sold in limited numbers.
However, if you look at the percentage growth among all luxury carmakers you will see healthy growth figures. Overall growth in the luxury passenger car market is about 30 percent per annum, compared to just 13-15 per cent for the entire passenger car market. This figure is much more than many other developed countries, and hence luxury brands now see developing countries like India as hot markets to bring in their products.
BMW, Mercedes Benz, Volkswagen, Audi and Skoda all have assembly facilities in India. Other luxury brands such as Maserati, Ferrari, Bentley, Rolls Royce, Porsche, Lamborghini have chosen importer dealers to distribute their brands in India, and have invested in setting up competent service networks. As disposable income levels and per capita income is set to rise further in India, sales of luxury car brands is only likely to increase.