They’re young, they have deep pockets, and they’re not afraid to dip into them to buy anything that catches their fancy. Thanks to this growing tribe of well-paid young professionals, who don’t think twice before splurging on premium products, India’s luxury car market (vehicles priced at Rs 50 lakh and above) grew 36.85 percent to 38,680 units during the last calendar year.
According to data collated by automotive business intelligence firm JATO Dynamics, this growth in premium car sales was despite the challenges hindering the automotive industry, such as inflation, high-interest rates, prolonged waiting periods for high-end models, and the rise in vehicle prices. In contrast, the overall domestic Passenger Vehicle (PV) market grew just 4.4 percent, to 4.1 lakh units, in 2023.
“Traditionally, luxury car ownership in India was associated with established businessmen and families. However, the trend is shifting towards younger professionals, with a significant portion of buyers falling in the 31-45 age bracket. This ‘YOLO’ (You Only Live Once) generation prioritises experiences and self-expression, viewing luxury cars as an extension of their lifestyle,” said Ravi Bhatia, President JATO Dynamics.
In the Rs 50 lakh and above PV market, the Sports Utility Vehicle (SUV) segment accounted for the maximum share, at 22,678 units (58.62 percent), followed by sedans at 14,494 units (38.63 percent), and MPVs at 565 units (1.46 percent). Other segments such as coupes, cabriolets convertibles and hatchbacks collectively saw sales of 493 units (1,27 percent), as per JATO Dynamics India.
Continuing the trend, German luxury car makers Mercedes Benz and BMW reigned over the Rs 50 lakh+ car market with the top three players retaining their pecking order. While Mercedes Benz India led the market at 13,657 units, BMW was in second position at 7,109 units, followed by Audi with 3,094 units, according to JATO Dynamics India. The top selling models were the Merc E-Class (3,330 units), BMW 3 Series (2,702 units) and the C-Class(2,313 units).
“While brand legacy and prestige remain important, Indian luxury car buyers are increasingly value-conscious. They seek features, technology, and performance, along with the brand cachet. Additionally, sustainability is gaining traction, with interest in electric and hybrid luxury cars rising,” said Bhatia. Mercedes-Benz , while announcing its wholesale numbers, revealed that the company had recorded its highest-ever growth of 10 percent at 17,408 units in 2023.
“Our number one selling car is the E-Class longer wheelbase (LWB) version. While 55 percent of our sales are now derived from SUVs, we expect the E-Class model to be our top-selling model even this year,” Mercedes Benz India VP, Sales and Marketing, Lance Bennett, told Moneycontrol.
He revealed that while 12-14 percent of the company’s customers are salaried employees, there are a growing number of customers from the real estate industry and business owners. Quizzed about its aims to outsell the 3-Series with the C-Class, he said, “Our strategy is not based on competition but obviously we now have the GLC, which is our strongest selling SUV, which will put us in a formidable position for 2024 as well.”
Similarly, BMW Group India, while sharing its retail numbers, revealed that it had delivered 14,172 cars (13,303 units of BMW and 869 units of the MINI). “As we change the game, our sight is set on increasing market share and setting new benchmarks,” asserted Vikram Pawah, President of BMW India.
Asked about its bestselling models, Pawah revealed, “The highest selling model happens to be the BMW 3 Series, which had sales of 2,702 units in 2023, contributing 20 percent of our sales. Following that, the bestselling model is the BMW X1, with 2,633 units, which again contributed 20 percent of our sales. The third bestselling model for us is the X7 a Seven, with 1,513 units, which contributed 11 percent of our sales.”
Audi, the German luxury car manufacturer, announced growth of 89 percent at 7,931 units in the January to December 2023 period. “2023 marks another successful year for us and our diverse and desirable product portfolio continues to garner robust demand,” Balbir Singh Dhillon, Head of Audi India, said in an official statement.
To be sure, while the luxury car market continues to witness an upsurge, its contribution to the total PV market of 41,43,413 units last year (38,20,651 in 2022) remained negligible. According to JATO Dynamics, while cars priced at Rs 50 lakh and above accounted for 0.73 percent of the total market in 2022, that share inched up to 0.93 percent, in 2023.
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