Rising luxury car sales moving India up the elite club?


India’s rise as an upcoming global economic superpower is well known. Be it manufacturing, services, FMCG, automotive sector, its success has been well documented. With the advent of Nano and upcoming low cost models from various other companies, India is being regarded as the low cost car manufacturing hub of the world with 24 lakh cars being produced every year.


With its excellent R & D facilities to back the low cost labour, many multinationals have set up operations for this purpose. But now something more revolutionary is happening.

India’s top 10 luxury car models dominated by Mercedes Benz, BMW and Audi have seen a 57% surge in their sales between June 2009 – May 2010.  Audi A6, Mercedez Benz E – Class and BMW 3 Series models saw more than 100% growth from last year. Volkswagen had sales of 1,876 cars from January 2010 – August 2010, an increase of 66% of the same period last year

So how come is the shift happening in such a dynamic fashion?

  • Increasingly affluent population with high disposable incomes and an extravagant lifestyle
  • Increasing customer confidence because of the growth of the economy – 8.8% this year compared to just 6.7% last year
  • The target customer who used to over 45 (top level executives) earlier has changed to mid 30s (entrepreneurs and those have reached success at a young age)
  • Newer reasons to buy these cars such as festivities, gifts and also a means of flaunting one’s wealth. Today’s generation increasingly believes in the phrase “Got it? Flaunt it!”
  • Upgradation to higher end models because the prices fall after a very small period of time. Eg: Porsche Cayenne which is available for Rs 95 lakh in the showroom can be found for less than Rs 75 lakh in the used car market after one year of use
  • Increasing demand from the rural areas which is in keeping pace with the economic growth and development

The future of luxury cars in India looks increasingly bright. It is expected to be the fifth largest automobile market in the world by 2015.

This growth will not only be driven by the middle class because of their increasing purchase power but also the rural consumers. This gives these companies a great opportunity for the future.

What kind of strategy do you think luxury car companies should employ for India?

1 Comment
  1. Yaamini says

    Dont have much knowledge about the automobile sector . Very interesting article, the stastics u have mentioned are rally good. Helped me improve my knowledge about the automobile industry

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