Luxury Car Market Potential in India
Global performance of Luxury Car has been on a high in 2018, but in India last year was a challenging one. The Retail Volumes of the major luxury car manufacturers for the year 2018 is as shown (Source: Autocar) –
Developed Markets: Luxury Cars, Volumes & Contribution into Total Vehicle Sales:
In developed markets, Luxury vehicles typically account for around 5-6 percent of the overall market.
For eg: In USA, True Blue Luxury Brands (Mercedes, BMW, Tesla, Volvo, Land rover, Porsche, Mini, Jaguar) – 11.13 lakh cars sold out of the Total Vehicle Sales 1.72 crores – 6.37%. Even the premium cars from Ford, Subaru, Honda, Toyota & Kia stable included in the overall calculation – the approximate penetration should be looked at 8%.
India & its potential:
True Blue Luxury vehicle Sales in India in 2018 stood at 40,688 nos.; while the Total Vehicle Sales should be approximately at 34.5 lakh units (yet to be declared by SIAM). i.e, a Luxury vehicle penetration of 1.2%. Even today the macroeconomic forces, Elections is playing on Customers Minds is slowing down demand. We are hopeful that the Overall Market alongside with the Luxury Car grows atleast 15% post elections. Feedbacks from CEO’s – Luxury car Market:
“We are satisfied with our sales performance in 2018 despite facing strong macroeconomic headwinds in H2 (second half), resulting in low consumer sentiment that posed significant sales challenges. We, however, made a strong comeback in the Q4 period (October-December) and were able to achieve a year-on-year growth,” said Martin Schwenk, MD and CEO, Mercedes-Benz India.
“2018 was surely a challenging one for the auto industry in India, especially in the second half of the year. The luxury segment was under pressure owing to financial market development, changing customer sentiment and changes in tax policies. We faced some unforeseen business challenges during the year, which led to reduced deliveries for 2018,” said Rahil Ansari, Head, Audi India.
“The auto industry faced strong headwinds in 2018, especially in the second half with tight liquidity conditions, increased upfront insurance costs and increased lending rates. Despite that, the growth of Jaguar Land Rover in India has been very encouraging,” said Rohit Suri, president and MD, JLR India.
OUTLOOK FOR 2019:
Cautiously Optimistic is the Word for 2019…