{"id":119708,"date":"2015-04-18T13:21:44","date_gmt":"2015-04-18T11:21:44","guid":{"rendered":"http:\/\/www.gtspirit.com\/?p=119708"},"modified":"2015-04-17T12:23:53","modified_gmt":"2015-04-17T10:23:53","slug":"indian-luxury-car-market-has-grown-eight-times-since-2007","status":"publish","type":"post","link":"https:\/\/gtspirit.com\/2015\/04\/18\/indian-luxury-car-market-has-grown-eight-times-since-2007\/","title":{"rendered":"Indian Luxury Car Market has Grown Eight Times Since 2007"},"content":{"rendered":"

\"Super<\/a><\/p>\n

Recent numbers indicate the luxury car market in India has grown eight times over the last seven years. An estimated 33,000 units were sold in India in 2014 – a steep rise from just 4,000 units sold in 2007.<\/p>\n

The industry has\u00a0stagnated over the past year, with just around four percent growth recorded in 2014, but leading brands like Mercedes-Benz and Audi registered record sales.<\/p>\n

Moreover, experts believe that the luxury car sales could cross the 100,000 mark by 2020.<\/p>\n

\u201cWe are bullish on the potential of the Indian market and estimate that the luxury car industry volumes in India could cross 100,000 units by 2020,\u201d said Eberhard Kern, MD, Mercedes-Benz India.<\/p>\n

Joe King, MD, Audi India, on the other hand says that the number of luxury cars sold will \u201cat least double\u201d by the end of this decade.<\/p>\n

External factors like the government\u2019s policies make the industry unpredictable, yet India is viewed as a favourable market by the luxury car brands.<\/p>\n

Mercedes-Benz India has doubled its production capacity at its Chakan facility in Pune\u00a0to 20,000 units, which\u00a0makes it\u00a0the luxury brand with the “highest installed capacity in India\u201d. The company has also increased its total investment to INR 10 billion and will launch 15 new models in India in 2015. Mercedes-Benz India grew by 13 percent in 2014 and made 10,201 sales- its highest ever tally. This enabled it to leapfrog BMW India as the second best selling luxury car brand in the country.<\/p>\n

It trails Audi India- which has consolidated itself as the leading premium car brand in the country after selling 10,851 units in 2014 and is now looking for sustainable long-term\u00a0growth.<\/p>\n

\u201cIndia is a strategic market for us and the fourth top market in Asia after China, Japan and South Korea,\u201d Luca de Meo, Audi Global Head of Marketing and Sales, was quoted as saying.<\/p>\n

Audi controls 34 percent of the luxury car market in India- which is \u201camong highest for the company globally\u201d. By comparison, in China, where half of the world\u2019s A6\u2019s are sold, Audi controls 32 percent of the luxury car sales.<\/p>\n

Incentive financial schemes, heavy discounts and affordable EMI rates have made Audi a popular choice among the Indians. Consumers are craving luxury and Audi provides premium cars at affordable rates<\/a>. Its recent launch- the Audi A3, is virtually the cheapest luxury car in India.<\/p>\n

Looking at Audi’s rise, Mercedes-Benz have adopted a similar strategy- focusing on the more affordable models (that come in the range of INR 2.5 to 4 million). It has introduced\u00a0the CLA-Class, B-Class Facelift<\/a> and the upgraded A-Class in 2015. The trio, along with the GLA-Class, are Mercedes-Benz’s new generation compact cars that\u00a0contribute towards 20 percent of the total sales in India. In addition to that, the company expects this segment to grow by 50 percent in 2015.<\/p>\n

Volvo and Jaguar Land Rover (JLR) are also looking to tap into the huge potential of the Indian luxury car market by trying to provide affordable cars to the customers.\u00a0Volvo is finding local partners that could supply them with automobile parts. With the excise duty on auto parts an astonishing 60 percent, this will help the company reduce its costs. Jaguar, on the other hand, is launching the new XE as its entry-level car in India.<\/p>\n

Moreover, although BMW India has revamped its marketing strategy in India over the past three years, company’s President, Phillip van Sahr, still holds the opinion that the “future of luxury car market belongs to India\u201d.<\/p>\n

BMW sold just 6,812 units in 2014. Owing to the economic slowdown, it decided to take a hit on its sales by focusing on the high-end models. This has brought about a 11-fold increase in its profits. The company has settled on the strategy of focusing exclusively on the premium section of the society, with its last four launches being the i8 plug-in hybrid, M5, M3 and the M4 Coupe. All are priced upward of INR 10 million. Moving on with its strategy, BMW India has also tied up with six new local manufacturers for automobile parts.<\/p>\n

This will reduce BMW India’s cost of production. However, it is unlikely the company will pass on the financial benefit to the consumers. Mercedes-Benz, Jaguar and as aforementioned, Volvo, are also taking the localisation route. Unlike BMW, these car brands are planning to pass on the financial advantage to the customers as well. Last year, when Mercedes-Benz locally assembled the S500, the price of the car was reduced by INR 2 million.<\/p>\n

With Narendra Modi\u2019s government proclaiming the \u201cMade in India\u201d ideology on all fronts, localisation is key for a long-term future in India for any foreign company. Excise duty on cars\u00a0is astronomical.<\/p>\n

This has and will continue to prevent elite brands like Bentley, Lamborghini, Ferrari and Aston Martin from fully entering the India market, despite the growing interest among the people.<\/p>\n

\u201cThe import duty in India is higher than many other countries. We want to sell more cars in the country but the import duty in India is high as much as 167 per cent. This huge import tax will impact the sales of the super cars in the country,\u201d said Automobili Lamborghini President Stephan Winkelmann.<\/p>\n

While some selected brands have established a strong foothold in the\u00a0India luxury car market, it will be interesting to see whether the future will only benefit those selected companies or also pave the way for new brands to make their way into the country.<\/p>\n","protected":false},"excerpt":{"rendered":"

Recent numbers indicate the luxury car market in India has grown eight times over the last seven years. An estimated 33,000 units were sold in India in 2014 – a steep rise from just 4,000 units sold in 2007. The industry has\u00a0stagnated over the past year, with just around four percent growth recorded in 2014, […]<\/p>\n","protected":false},"author":111,"featured_media":119709,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[74,35209,10,3771,35380,35333],"_links":{"self":[{"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/posts\/119708"}],"collection":[{"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/users\/111"}],"replies":[{"embeddable":true,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/comments?post=119708"}],"version-history":[{"count":0,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/posts\/119708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/media\/119709"}],"wp:attachment":[{"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/media?parent=119708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/categories?post=119708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gtspirit.com\/wp-json\/wp\/v2\/tags?post=119708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}