The luxury car market in the country is bracing itself up to end this calendar with double-digit growth as the young affluent Indians’ affinity for marquee cars continues to rise. “The luxury car segment has been able to hold its allure despite the turbulent and challenging times faced by the entire automotive sector. While this segment also has witnessed a slight dampener in terms of postponement of purchases, it is still growing impressively at 15 per cent plus year-on-year. For the next three years, the segment growth is expected to continue at 15 per cent upwards,’’ points out a report of CII-IMRB.
Majority of the luxury car buyers in India are below 40 years, and a substantial portion of them are first-time buyers. They come from not just metros, but from other cities and small towns too. Buoyed by the growing appetite, leading luxury car makers, particularly the German brands – Audi, Mercedes Benz and BMW – have come out with a slew of new models with sportier features at lower price points.
“A major driver of luxury car market’s expansion has been the roll-out of newer vehicles at significantly lower price points. They pull a new set of consumers to actively consider premium vehicles. This trend will continue, and be a significant part of the growth story for luxury brands in India,” says Wilfried Aulbur, Managing Partner, Roland Berger Strategy Consultants.
Mercedes Benz’s new low-priced models include A-Class and the B-Class diesel. The company has already seen the age of its customers coming down drastically, especially with the launch of compact models. For Audi, its entry-level models have been a strong driver of its volumes. And, the company focuses on young achievers. Presently, average Audi buyer is 30-35 years old. BMW has also launched a slew of models to lure buyers.
The first-time buyers have been wooed by a combination of attractive schemes and finance offers. Luxury car makers are offering schemes such as five-month EMI (equated monthly instalment) waiver, one-year insurance, and three years of free maintenance. The loan repayment time period for this segment is seven years. Also, there are options such as flexible EMI and attractive buy-back offers. Audi and Mercedes are confident of ending 2013 with double-digit rise in sales. Porsche, Lamborghini, Bentley and Rolls Royce, among others, are also charting aggressive growth plans.