In the bad
old days, two words were often considered taboo – Sex and Luxury. In a
conservative India, talking about sex was a big “No”. Equally, in a socialist
driven economy, the term “Luxury” was pure blasphemy. But in modern India,
these words have become a way of life. Sex is glamorised, worshipped and
flaunted. So is luxury. Be it gadgets, watches, homes, clothes, travel, there
is an element of luxury everybody yearns for. And when it comes to luxury cars,
Indians are beginning to step out and shop for them.
like Mercedes, BMW and Audi have flocked to Indian shores and have found
success. Other luxury and super luxury brands too are not far behind in setting
up shop here in terms of a few dealerships. These include the likes of Bentley,
Bugatti, Rolls Royce, Porsche, Aston Martin, Maserati, Jaguar, Land Rover,
Volvo , Ferrari and Lamborghini, among others.
But will this
market for luxury cars grow? Yes and No. Yes, if there is a level playing field
for growth. No, if silly macro-economic fundamentals are simply pushed under
the carpet. A case in point is the recent ban of diesel cars with engine
capacities of 2000cc and above in Kerala and Delhi NCR. A lot of luxury car
brands (premium, luxury and super luxury) were affected.
Luxury car brands
operating in India sold approximately 35,300 units in 2015. The top three
luxury car makers in India are Mercedes-Benz India, Audi India and BMW India,
followed by Jaguar Land Rover and Volvo Auto India. According to the latest
sales forecast from IHS Automotive, a global research and analysis company, luxury
vehicle sales in India are expected to more than double in the next five years.
In 2015, luxury vehicle sales in the Indian market stood at nearly 35,300 units.
This is expected to grow to 87,300 units by 2020 with significant volumes being
added by existing players apart from new entrants like Lexus, Infiniti, and
Genesis brands. Despite a wider participation by other luxury brands, the three
German brands are expected to control more than 80% of the Indian luxury
vehicle market in 2020, according to IHS Automotive forecasts.
may sound exciting but then compare it to that of China, we may as well suck
our thumbs in gloom. BMW and MINI together sold 463,736 vehicles in 2015 in
China. In the same year, Audi AG recorded 570,899 vehicles. With sales of 373,459 cars in 2015, China
became the largest single market for Mercedes. Analysts at IHS Automotive
forecast that Mercedes' luxury car sales worldwide will exceed those of BMW
sales of Mercedes-Benz in the first quarter (Jan-march 2016) globally reached
483,487, topping BMW's 478,743 cars. As for Audi it sold 455,750 vehicles in the first three
months of this year.
The growth of luxury cars in India
IHS Automotive, luxury vehicle sales in 2015 marked a growth of 6.4% year on
year (y/y) from nearly 33,200 units sold in 2014. The market was almost
entirely led by Mercedes Benz which won back the leadership position from Audi
by selling nearly 12,900 units in the year. A slew of model launches and a
strategy to focus on compact vehicles such as A- and B-Class led the surge in
Mercedes’ annual sales. This contrasted with tepid growth rates for Audi and
BMW. While Audi’s sales increased 1.9% y/y to 11,100 units in 2015, BMW
continued to languish at third spot as sales grew 2% y/y to 7,500 units.
Although Audi and BMW underperformed the country’s luxury market, their
performance was better than competition as Jaguar Land Rover (JLR), Volvo, and
Mini posted sales declines during the year.
immediate future, according to IHS Automotive , Audi and BMW are expected to
shed their underperformance and gain some ground from Mercedes-Benz which is
the most impacted of the lot from the conditional ban on diesel vehicles in the
national capital region (NCR). While volume models by Audi and BMW have smaller
engines, none of the models sold by Mercedes-Benz in India is powered by engine
honouring this threshold (below 2000cc diesel engine capacity). As a result,
BMW and Audi are expected to post double-digit sales jumps of 37.9% and 18.5%
respectively. Majority of BMW’s growth is expected to come from compact models
such as 1-Series and X1 sport utility vehicle (SUV). Similarly, Audi is likely
to gain on the basis of A3 and A4 sedans, although sales of its Q3 SUV are
expected to be dented by renewed competition from BMW’s latest-generation X1.
On the other hand, the regulatory development is likely to result in 6.6% y/y
contraction in sales volumes for Mercedes-Benz.
According to IHS Automotive forecasts, the
market will see a wider participation of luxury brands in the next five years
even though the traditional leaders are expected to maintain their lead.
Important among the new entrants will be Lexus, Infiniti, and Genesis. Making
further inroads will also be Porsche and Volvo in the coming years.
Nevertheless, the market will continue to be driven by the German marquees
which are expected to further cement their position in the market.
phase of growth in the Indian market will be driven by retail network expansion
by luxury automakers beyond the metropolitan areas as well as in other
operations including finance. This will be coupled with increasing product
localization which is expected to offer the German majors a competitive
advantage over their newly-entering competitors.
Automotive also notes that in terms of body styles, the market is going to
witness a rich mix of hatchbacks, sedans, SUVs and even MPVs. Lluxury hatchbacks
are expected to gain market share from its established competitors – sedans and
SUVs. Luxury hatchbacks are a relatively new addition to India’s product mix.
This means sedans - which account for more than half of the current luxury
vehicle sales – will account for only 44.2p% in 2020. Another interesting trend
is that SUVs, while managing volume growth, will lose market share to
hatchbacks and will see contribution declining to 31.5% in 2020 from 35.2% in
2015. In the same timeframe, hatchbacks are expected to account for 17.2% of
the luxury market, up massively from just 6.5% in 2015.
While Mercedes-Benz has taken a lead here with
its A- and B-Class hatchbacks, Audi and BMW will also come up with their
competing nameplates. Playing an important role in Audi’s revival will be the
new compact models including Q2 SUV and A1 hatchback which are scheduled to be
introduced in 2017 and 2018 respectively. On the other hand, BMW will gain from
the introduction of next-generation 1-Series which will be offered in hatchback
and sedan form, says the IHS Automotive report.
poised to outdo competition in 2016
meantime, according to Mumbai-based TRA Research (formerly Trust Research
Advisory), BMW has been ranked the highest on ‘Buying Propensity’ in the luxury
four-wheeler category, Buying Propensity is comprised of Brand Trust and Brand
Attractiveness, that measure need and desire based transactions, as per the
research firm. Buying Propensity represents the consumers’ keenness to buy an
aspect BMW serves high on. In the Buying Propensity race BMW is followed by its
German counterparts Audi at 2nd place and by Daimler-owned
arch-rival Mercedes Benz in 3rd place.
BMW’s high Buying Propensity, N. Chandramouli, CEO, TRA Research (a Comniscient
Group company) stated, “The two matrices of Trust and Attractiveness stand at
either end of the Buying Propensity axis, along which all buying decisions are
expressed. If Buying Propensity is high, one can expect actual buying to
increase as Buying Propensity precedes actual buying decisions. After a record
of being at the top in sales for the last ten years BMW’s fall may only be temporary. BMW’s current strategy to redefine premium
customer experience and their high Buying Propensity makes it a brand to watch
out for in the coming year.”
Propensity’ of a brand is a concept that is the confluence of the matrices of
Trust and Attractiveness, developed over years of research with psychologists,
sociologists and communication experts. The Buying Propensity report is generated
based on the data collected from 5000 influencers who are interviewed each year
across 16 Indian cities. Brand Trust and Brand Attractiveness are the two globally acclaimed
proprietary matrices of TRA Research, a Comniscient Group company.
stellar automotive manufacturer has followed an aggressive path in India and
after Audi India dethroned BMW to become numero uno in 2013, it lost pole
position to Mercedes in January 2015. The tri star brand brought out as many as
15 models in 2015 and their state of the art design language coming in the form
of the CLA and GLA brought it to second position in terms of global sales as
well. Relentless in their ways Mercedes ended up selling as many as 13,502
units by the end of 2015 making them the top selling brand in the country.
Mercedes has already lined up new launches this year which began with the
launch of their GLS SUV and the soon to come GLC and S-Class cabriolet.
Currently the car manufactureromotive
manufacturer has 16 vehicles in its portfolio with the most expensive
being their Maybach S-600 Guard.
its conquest of the Indian market in the year 2004 and set up the Audi India
division in 2007. By the year 2013 Audi was the most selling luxury car
brand in India. Despite losing its top
spot to Mercedes Benz in 2015, Audi India has maintained a growth rate of 3pc
year on year in 2015 by selling 11,192 vehicles as compared to 10,851 in 2014.
The company also brought forth 10 new products in the year 2015 including their
R8 LMX, TT, S5 Sportback and the new Q7. The company has followed a top down
approach and brought in some of their premium luxury and performance cars to
the country. Audi India has a wide line up of vehicles in the Indian market
ranging from sedans to SUVs and top end performance vehicles. The company also
maintains a synergy in the technology used in their top of the line products
which can also be found in their entry level vehicles, a good example of this
is the Audi MMI display.
market has remained price sensitive to a great extent and affordable quality
has been the driving force behind Audi's campaign in India. Their most expensive
vehicle on offer in the market is the A8 L Security edition which comes with an
earth shattering ex-showroom price tag of Rs. 9.2 crore. Audi India recently
launched their R8 V10 Plus which is one of the most capable sports cars
available in the Indian market today.
This German stalwart
has been the leading manufacturer of luxury cars globally in terms of sales
since 2005. BMW surpassed Mercedes in terms of sales in the Indian market in
2007 to become to the number one selling luxury car brand in India. BMW
retained top spot till 2013 when it was replaced by Audi. The company has been
witnessing a global slowdown in terms of sales and reported the slowest growth
in sales since 2009 for the year 2015. BMW India has been growing its line up
by introducing a mixture of luxury SUVs and sedans as well as performance
vehicles. When it comes to performance vehicles BMW has one of the most unique
offerings in the segment in the form of a thorough bred electric hybrid vehicle
which goes around by the name of i8. While BMW does display its advanced
engineering capabilities through the i8 it also makes more affordable and
practical cars, the range starts with the BMW 1 Series which is priced at Rs.
29.9 lakh (ex-showroom). However BMW also has on offer cars which can make even
the richest drool. On the luxury front one can buy a fully loaded 7 Series for
Rs. 1.7 crore (ex-showroom. Having something for everyone, BMW also has the Z4
for those who love topless motoring.
JAGUAR LAND ROVER
and Land Rover brands owned by Tata
Motors set up shop in India in 2009. While the company has faced two years of
flat lined sales for 2014 and 2015 selling almost 3,000 units each year, 2016
saw the company posting strong sales figures for the first quarter. JLR sold
more than 1,000 units in the first quarter of 2016 and registered a growth of
the company has almost 23 outlets in the country and is planning to increase
sales volumes to 4,000 units in FY 17 and is targeting a growth rate of
18-20pc. Jaguar also launched the new XE at the 2016 Auto Expo with a very
aggressive price tag of just Rs. 39.9 lakh (ex-showroom). Keeping in mind that
India is a price sensitive market the company plans to go head to head with the
big three by aggressively pricing their products. At present JLR holds a market
share of close to 10pc for the luxury car segment in India and plans to further
expand that to 20pc in the coming years.
Jaguar is retailing 4 models in the Indian market while Land Rover has 6 models
on offer. The latest from Jaguar is the XE which has effectively opened up a
new market for the Jaguar brand and brings in a new customer base for the
company as well. While the XE is the most affordable in the Jaguar line up the
F-Type is their blue blooded contender with a hefty price tag of Rs. 1.9 crore
Rover brand has vehicles in its Indian portfolio which range from Rs. 34.9 lakh
(ex-showroom) to Rs. 3.8 crore (ex-showroom). The Freelander 2 from Land Rover
is the most affordable product in the portfolio and features the brands rich
engineering and design heritage. One of the more popular models from the lineup
is the Land Rover Range Rover Evoque.
VOLVO AUTO INDIA
Also known as
the manufacturer of the safest cars in the world, Volvo, owned by Chinese
company Geely has been growing at a steady pace in the Indian luxury car
market. While the company reported a sale of 943 units across the country in
2013, Volvo vehicle sales grew to 1,202 units in 2014 and in 2015 the company
sold 1,423 units across the country reporting a growth of 18.3pc. At
present Volvo has 17 dealerships across
the country and are offering seven models in their India portfolio which includes
the new XC90, S80, S60, XC60, V40, V40 Cross Country and the S60 Cross Country.
affordable model in the Volvo lineup is the V40 hatchback which comes at a
starting price of Rs. 25.5 lakh (ex-showroom). One of the latest models to be
introduced in the Indian market by Volvo is the XC90 which has been priced
aggressively to compete with the leaders of the industry. The XC90 is available
for a starting price of Rs. 71 lakh (ex-showroom) and goes head to head with
the likes of the Mercedes GL Class, Audi Q7 and the BMW X5. The XC90 is also
the most affordable vehicle in its segment and offers customers a range of
latest reports, Volvo is seeking to step up its play in the luxury car market
in India with the launch of a series of compact models starting next fiscal
models in this category to hit the road will be a sport-utility vehicle
codenamed Concept 40.1 and a sedan currently called Concept 40.2. Volvo, which
unveiled the 40 series compact cars at its headquarters in Gothenburg, Sweden,
recently, will pit these against rival auto maker's entry-level luxury models
such as BMW X1, Audi Q3, Audi A3 and Mercedes-Benz GLA.
cars will go into production in 2017. The India launch will take place within
six to eight months thereafter.
In India, the
Swedish car maker is gearing up to launch a hybrid version of SUV XC90 (T8) in
the next few months. The 40 series cars are based on a new platform which Volvo
will share with Chinese owner Zhejiang Geely Holding Group.
In the Indian
context Bentley has one showroom each in New Delhi and Mumbai and the company
is planning to setup their third showroom in Hyderabad. Satya Bagla, Managing
Director, Exclusive Motors Pvt. Ltd., said, "Currently the company is
growing at 15pc year on year and hopefully by next year we should be in the
three digit sales figures." The company has already received three digit
bookings for their recently launched Bentyga Luxury SUV. Globally the company
produced 10,001 units in 2015 it aims to increase that by 15pc as well.
the company has 4 models for its Indian portfolio which include the Flying
Spur, Continental, Bentyga and Mulsanne. The most affordable of in Bentley's
lineup is the Flying Spur which starts at a price of Rs. 3.2 crore (ex-showroom).
the company has 6 models on offer for the Indian market and the range starts
from the iconic Porsche Boxster which is priced at Rs. 92 lakh (ex-showroom).
The company currently also has a few SUVs on offer for the Indian market like
the Macan and the Cayenne. If speed is what makes you tick then Porsche has you
set on that front as well with their Cayman, Panamera and the 911.
British car manufacturer has been selling its vehicles in the Indian market for
some time now, they currently have three models on offer for the Indian market
which includes the Phantom, Ghost and Wraith. The company plans to launch the
Rolls-Royce Dawn in the Indian market by the end of 2016. While the Rolls Royce
Phantom is the most affordable vehicle that the company is offering in the
Indian market it also has the most expensive variant in the portfolio which
goes up all the way to Rs. 8.2 Crore (ex-showroom).
super car manufacturer which made legendary sports cars like the Countach and
the Diablo is at present operating in the Indian market with two dealerships,
one in New Delhi and one in Bengaluru. The company is currently offering the
Huracan and the Aventador models in the country in CBU form. While the Huracan
starts at a price of Rs. 3 crore (ex-showroom), Aventador is available for a
starting ex-showroom price of Rs. 3.7 crore.
It was in
July 2015 that Maserati had re-entered India. After a forgettable first stint
in India when it managed to sell barely 10 cars in a little over a year,
Italian luxury car maker Maserati now plans to launch models priced up to Rs
2.2 crore and a target to sell in double digits each year.
part of the Fiat Chrysler group, had first entered India in 2011 appointing
Shreyans Group as its official importer and distributor. The stint with
Shreyans came to an end soon. The company is now selling four models in India
-- Quattroporte, Ghibli, Gran Turismo and GranCabrio, all priced between Rs
1.14 crore to Rs 2.2 crore.
Italian counterpart Maserati, Ferrari too was back once again in August 2015 in
India when it opened its second innings in the country by showcasing the
Ferrari California T in Mumbai. Ferrari at that point said it would be operating
out of two dealerships, one in Mumbai and the other in Delhi. Dealerships in
Bengaluru and Chennai could be on the anvil, said an official, depending on the
growing interest from other metro markets.
car manufacturer had an India debut in 2011, but had severed ties with its
India importer following several consumer complaints of poor after-sales
California T is the entry level Ferrari, and replaces the erstwhile California,
though it retains the 2+2 layout, replete with a retractable hard top. Over the
next few months, the luxury auto giant lined up other models in India, such as
the new 488 GTB, the 458 Speciale, the 458 Spider, and the four-seater FF.