YOLO generation driving luxury car sales, says Landmark’s Aryaman Thakker

Landmark Cars made its stock market debut in December 2022

There is an increasing trend of people willing to spend money on luxury cars mainly led by the you only live once (YOLO) generation, says Aryaman Thakker, Executive Director of Landmark Cars. The company is the only listed player in the car dealership segment and focuses on premium and luxury cars. In a conversation with Moneycontrol, “The average age of Mercedez S Class buyers has fallen to mid-30s from mid-40s,” Thakker said.

Edited excerpts from the interview:

What has been the trend in luxury car sales in the context of the overall passenger vehicle segment?

In CY23, Volvo, Lexus, and Porsche sales grew 20 percent year-on-year compared to the mid-to-high single-digit growth witnessed in the overall passenger vehicle segment. Countries such as the US and China are way ahead in penetration than India. There is a large headroom for growth and we believe that the premiumization trend is just starting to kick in, especially after the Covid-19 pandemic.

What is driving this demand for luxury sales?

Apart from the rise in income and an uptick in demand, there's a definite shift in the mindset of consumers, and the luxury space is largely driven by sentiment. The mood in India is quite positive and we seem to be in a stable position despite some macro uncertainties across the globe. It is a multitude of these factors that seems to be driving this trend further.

In late December, Landmark entered South India in Hyderabad, specifically with Mercedes. How crucial is South India as far as business is concerned and what kind of figures are you expecting, once you penetrate the region further?

South India was a missing piece in our puzzle as we were heavily focused on the North West and a little bit on the East and Central States. Landmark's strategy has always been to go deep into geography. We expand and then continue to expand with possibly other brands in that region, mainly to get economies kicking in. I think this is an initial foray into the south end beginning our operations only in each one of our next financial year with the service centre, but I think we will then look at expanding further to different opportunities in the region. As for figures, it is a little too early to predict anything as we're at a nascent stage in the South.

Given the rise in EVs and the government push towards sustainability, is the EV segment a space that Landmark is eyeing?

As and when EV penetration picks up in the country, Landmark Cars can potentially benefit given that it has partnerships with 3-4 existing players in the market. We also retail BYD Cars (the largest EV player in the world), MG is also planning new launches this year, and Mercedez also has 3-4 models in the space. The EV segment in India is currently focused on the premium space apart from two to three entry-level cars. Once the likes of Maruti and Hyundai penetrate further, India may see a boost. There is also a lot of money being pumped into infrastructure and that's also a positive for the sector.

India's luxury penetration when compared with China is significantly lower. Do you see that changing significantly in the foreseeable future?

China went through a phase where in the early to mid-2000s, they had substantial vertical growth and I think India seems to be at the starting phase of a similar journey where the nation is growing, incomes are rising, and the mood of the nation is positive. While there's still time for us to overtake China, there are legs to this rally. India's mood is pretty solid and we are at the starting point of a longer journey. With all major luxury car makers now focusing on India, the country has become a prominent player in the global automotive landscape.

As per data, India's luxury car segment grew 37 percent despite inflationary pressures and rising interest rates. Do you see this young generation as a very good target consumer for your business?

We are seeing younger buyers coming in. For instance, the average age of Mercedez S Class buyers has fallen to mid-30s from mid-40s. Furthermore, only 4 percent of millionaires in India own a luxury vehicle compared to 60 percent globally which suggests that there is a lot of upside in India, and the YOLO generation will also be a key contributor to this rally.

In tier 2-3 cities, the pre-owned segment is on the rise. Do you see this as an opportunity to capitalise and what is landmark's strategy given that competition already exists in the market?

Historically, this space has been extremely unorganised. Multiple brands have come but all chasing GMV while being highly unprofitable. Landmark is currently assessing the strategy as we want to run the business profitably. We have decided that Landmark will only buy and sell cars of its brands given the expertise we have. We have set a target of Rs 100 crore in revenue from this business and we are on course to meet that. Next year, we plan to double this and make pre-owned luxury cars a substantial part of our business.