India luxury car market accelerates
German giant Mercedes admits it was “a little astonished” when Indian customers snapped up one hundred twenty five of its fresh top-of-the-line S-Class luxury cars costing $US250,000 ($A279,767) apiece in just sixteen days.
India’s auto industry has skidded onto an icy patch and is set for a 2nd straight year of decline, but one segment still accellerating is luxury cars.
Analysts at India’s premier auto fair in the capital’s suburb of Greater Noida last week said for the “truly rich”, economic downturns have a “negligible influence” on their luxury spending.
The wealthy are much less sensitive to high interest rates and are more resilient overall to downturns, say analysts.
“Luxury cars sales are still growing at 15-per cent-plus year-on-year. For the next three years, segment growth is expected to proceed at fifteen per cent upwards,” noted a report by the Confederation of Indian Industry and market research stiff IMRB International.
Sales have gone into overdrive for parts of the luxury auto segment. Daimler AG’s Mercedes Benz, for example, eyed sales rocket thirty two per cent year-on-year in India, despite punitive import tariffs.
Still, “while we believe strongly in our product, we were a little astonished when we sold one hundred twenty five S-Class cars in sixteen days – and this was to customers who bought them look unseen”, Mercedes-Benz India chief executive Eberhard Kern said.
The cars purchased were the Indian launch edition of Mercedes’ latest luxury S-Class sedan, priced at 15.7 million rupees ($US250,000).
In acute contrast, passenger car sales are set to slump close to ten per cent in this financial year to March 2014, forecasts the Society of Indian Automobile Manufacturers (SIAM), after years of growing around thirty per cent.
The market has been hit by high borrowing costs and receding consumer confidence amid economic growth of just Four.Five per cent – half the rate seen during India’s boom times.
But while India staggers from its worst downturn in a decade, previous years of rapid growth have created a fresh moneyed class who are buying prestige marques and keeping the segment above water.
“Economic downturns have a negligible influence on luxury consumers . and income levels overall have been rising,” Shrawan Raja of Indian Autos Blog, an Indian motoring portal, told AFP.
Albeit World Bank figures demonstrate thirty three per cent of the planet’s poorest call India home, the country also has minted sixty five dollar billionaires, according to Forbes, and hundreds of thousands of dollar millionaires.
A decade ago, the lone luxury car commonly spotted on India’s famously congested, potholed roads was Mercedes, the very first premium carmaker to open shop in 1995. But now Audis, Jaguars, Bentleys, Aston Martins, Porches and other top badges regularly weave through traffic.
The big spenders are top executives, ex-farmers who’ve sold property for vast sums to developers and a junior, wealthy generation with different values from their frugal parents who shied away from “conspicuous consumption”, analysts say.
“There has been an attitudinal switch to spending money — making this a more hospitable place for luxury automakers,” Anil Sharma, senior research analyst at IHS Automotive consultancy, told AFP.
India’s luxury car market is still lil’ — the total sold by the big luxury players in India, Mercedes, Audi, BMW and Jaguar LandRover, was 30,100. But that number is forecast to climb by one hundred sixty eight per cent by 2018, according to consultancy IHS.
The market “is still in its nascent stages,” but will be “very significant for the future”, Mercedes’ Kern told AFP, adding, “Headroom for the market to grow is big”.
In mature markets, luxury cars account for ten to fifteen per cent of sales, while in India “just two out of every one hundred cars sold” is a premium vehicle, Audi overseas sales vice-president Terence Johnson told AFP.
“We’ve ten top priority markets which are strategic long-term and India’s one of them,” Johnson added.
Smaller cities and rural areas are also developing strongly as markets.
Delhi and Mumbai account for forty five per cent of Mercedes’ sales while the rest come from smaller centres, said Kern, adding more women are opting for luxury cars, especially sporty, smaller variants.
Analysts say bringing in entry-level luxury cars is a clever stir, noting people are usually hooked for life once they buy one.
“When a customer graduates to luxury cars, they don’t go back to mass-market nameplates,” said IHS’s Sharma.
India luxury car market accelerates, SBS News
India luxury car market accelerates
German giant Mercedes admits it was “a little astonished” when Indian customers snapped up one hundred twenty five of its fresh top-of-the-line S-Class luxury cars costing $US250,000 ($A279,767) apiece in just sixteen days.
India’s auto industry has skidded onto an icy patch and is set for a 2nd straight year of decline, but one segment still accellerating is luxury cars.
Analysts at India’s premier auto fair in the capital’s suburb of Greater Noida last week said for the “truly rich”, economic downturns have a “negligible influence” on their luxury spending.
The wealthy are much less sensitive to high interest rates and are more resilient overall to downturns, say analysts.
“Luxury cars sales are still growing at 15-per cent-plus year-on-year. For the next three years, segment growth is expected to proceed at fifteen per cent upwards,” noted a report by the Confederation of Indian Industry and market research rock hard IMRB International.
Sales have gone into overdrive for parts of the luxury auto segment. Daimler AG’s Mercedes Benz, for example, witnessed sales rocket thirty two per cent year-on-year in India, despite punitive import tariffs.
Still, “while we believe strongly in our product, we were a little astonished when we sold one hundred twenty five S-Class cars in sixteen days – and this was to customers who bought them glance unseen”, Mercedes-Benz India chief executive Eberhard Kern said.
The cars purchased were the Indian launch edition of Mercedes’ latest luxury S-Class sedan, priced at 15.7 million rupees ($US250,000).
In acute contrast, passenger car sales are set to slump close to ten per cent in this financial year to March 2014, forecasts the Society of Indian Automobile Manufacturers (SIAM), after years of growing around thirty per cent.
The market has been hit by high borrowing costs and receding consumer confidence amid economic growth of just Four.Five per cent – half the rate seen during India’s boom times.
But while India staggers from its worst downturn in a decade, previous years of rapid growth have created a fresh moneyed class who are buying prestige marques and keeping the segment above water.
“Economic downturns have a negligible influence on luxury consumers . and income levels overall have been rising,” Shrawan Raja of Indian Autos Blog, an Indian motoring portal, told AFP.
Albeit World Bank figures demonstrate thirty three per cent of the planet’s poorest call India home, the country also has minted sixty five dollar billionaires, according to Forbes, and hundreds of thousands of dollar millionaires.
A decade ago, the lone luxury car commonly spotted on India’s famously congested, potholed roads was Mercedes, the very first premium carmaker to open shop in 1995. But now Audis, Jaguars, Bentleys, Aston Martins, Porches and other top badges regularly weave through traffic.
The big spenders are top executives, ex-farmers who’ve sold property for vast sums to developers and a junior, wealthy generation with different values from their frugal parents who shied away from “conspicuous consumption”, analysts say.
“There has been an attitudinal switch to spending money — making this a more hospitable place for luxury automakers,” Anil Sharma, senior research analyst at IHS Automotive consultancy, told AFP.
India’s luxury car market is still lil’ — the total sold by the big luxury players in India, Mercedes, Audi, BMW and Jaguar LandRover, was 30,100. But that number is forecast to climb by one hundred sixty eight per cent by 2018, according to consultancy IHS.
The market “is still in its nascent stages,” but will be “very significant for the future”, Mercedes’ Kern told AFP, adding, “Headroom for the market to grow is meaty”.
In mature markets, luxury cars account for ten to fifteen per cent of sales, while in India “just two out of every one hundred cars sold” is a premium vehicle, Audi overseas sales vice-president Terence Johnson told AFP.
“We’ve ten top priority markets which are strategic long-term and India’s one of them,” Johnson added.
Smaller cities and rural areas are also developing strongly as markets.
Delhi and Mumbai account for forty five per cent of Mercedes’ sales while the rest come from smaller centres, said Kern, adding more women are opting for luxury cars, especially sporty, smaller variants.
Analysts say bringing in entry-level luxury cars is a brainy budge, noting people are usually hooked for life once they buy one.
“When a customer graduates to luxury cars, they don’t go back to mass-market nameplates,” said IHS’s Sharma.