India’s luxury car market picking up
Besides the top three German luxury auto giants — Mercedes, Audi and BMW — the craze for Tata owned Jaguar & Land Rover ( JLR) has intensified manifold.
The Indian luxury cars market has seen an exponential sales growth in 2015 so far, especially in the compact luxury segment — an entry level luxury car with a price range between 30 to 40 lakh. The dramatic increase in the disposable income among the upper-rich in the last two years has helped this segment to catch on. About 30% of the luxury car sales come from this segment and the figure is expected to cross 50% next year. Besides the top three German luxury auto giants — Mercedes, Audi and BMW — the craze for Tata owned Jaguar & Land Rover (JLR) is also picking up among the Indian buyers. As India’s upwardly mobile middle class desires to top up their newly acquired status with the established auto brands, the luxury car manufacturers are launching newer models to leverage this upcoming demand. “Launching newer models has become the game changer for luxury car makers,” says Jayant Shenoy, a Mumbai based senior sales manager with MINI, a BMW brand.
The German players are launching lower-end luxury models to drive up their sales volume. Mercedes regained its top position in India by resurrecting its im- age among the young buyers by launching models like the CLA (Sedan) and the GLA (SUV). “Traditionally perceived as a comfort machine meant for an old man, Mercedes models now look prettier and sporty,” Shenoy said. Mercedes sold about 3,500 cars in the January-March Quarter of 2015, a 40% jump from the same quarter last year. Audi, the second largest player would soon be launching its new hatchback targeted at younger generation of buyers. It has recently launched the popular Audi Q3 in a new avatar. BMW seems to be struggling in the race as their model portfolio has become relatively old.
Analysts say that even though compact luxury cars are not big cars, yet they are being bought in large numbers because of the brand value associated with the German car brands. Moreover, their compact size helps in easy manoeuvrability on the cities’ roads. But the liking for Jaguar and Land Rover, which entered the Indian market in 2009, is also picking up fast. “The brand awareness problem that JLR confronted in the Indian market is more or less solved now,” says Shenoy. Moreover, “anyone looking beyond German brands is buying JLR as it actually stands out for its exclusivity”.