India is one of the largest passenger vehicle markets in the world, and vehicle manufacturers, both in the passenger and luxury segment see a huge potential for growth in the country. While the luxury car penetration level in the country is low, leading luxury car manufacturers are betting on the market’s potential, despite the impact of Covid-19. Launch of multiple strategically priced models at various price points coupled with smart financing schemes and a robust dealer network is boosting the sales of luxury cars in India
Due to the effect of the Covid-19 pandemic and the resultant nation-wide lockdown, in the period January-March 2020, approximately 7,000 luxury vehicles were sold in India, a decline of 35% year-on-year. Mercedes Benz India recorded a decline in sales by 38.5% to reach 2386 units, sales of BMW India in this period were 2482 units and Audi experienced approximately 30% decline in sales. In 2020, the luxury vehicles sector recorded its lowest sales since 2010 when 15,280 luxury cars was sold. An estimated 21,400 units of luxury cars sold in the country as compared with 24,000 units sold in 2019.
New sales will take a while to revive as potential consumers will revive their businesses, save for health related uncertainties and then invest in a luxury car. While some feel that potential consumers will implement austerity measures, others feel that due to lack of options such as luxury holidays, consumers will buy luxury cars to reward themselves. It is expected that there will be a rise in demand for pre-owned luxury cars.
Globally, once the Pandemic is over, it is expected that consumers will look for enhanced health, hygiene and sanitation features in the cars that they buy. Some aspects including in-built sanitization, advanced air-purification systems and anti-bacterial surfaces are likely to see interest from consumers. Players that are able to offer these and other innovative health features at an accessible price are expected to appeal more to consumers.
FOR MORE INSIGHTS ON THE LUXURY CAR SEGMENT IN INDIA, WRITE TO URVASHI@SMARTRESEARCHINSIGHTS.COM