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Luxury car sales are in free fall… But exotic ones are still in demand

This is the second year in a row that sales of luxury cars have tanked. This year’s performance is on cue to be the segment’s worst since tabulation of records began

September 11, 2020 / 09:45 AM IST
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If the retail volumes extracted from 86 percent of India’s regional transport offices (RTOs) in July and August are an indicator, the luxury car market is set to record its worst-ever yearly performance since tabulation of sales data began a decade ago.

Vehicle registration data collated by the Federation of Automobile Dealers Associations (FADA), in collaboration with the Ministry of Road Transport and Highways, show that demand for luxury cars was in free fall during these two months compared to the same period last year. However, sales of more expensive, exotic cars remained upbeat in July and August.

Against the grain

The sharp dip in luxury car demand is in contrast to the pick-up in demand seen for the rest of the passenger-vehicle industry. The August retail sales for mass-market passenger-vehicle brands such as Maruti Suzuki, Hyundai and Tata Motors were down only 5 percent.

Retails for Mercedes-Benz, BMW, Jaguar Land Rover, Audi and Volvo closed 54 percent lower at 1,852 units in July and August as against 3,985 units clocked in the same period last year.


The meltdown was in line with the halving of sales during the January-June period for Mercedes-Benz, India’s largest luxury car manufacturer, to 2,948 units. This was a drop of 55 percent from the 6,561 units sold in the same period last year. Other luxury carmakers refrained from sharing sales data for the same period.

“Demand for luxury cars has just collapsed. Enquiries have completely dried up and dealers are struggling. Buyers are either conserving cash or are expecting some kind of government incentive scheme,” said a senior executive from the dealer community.

Covid takes a toll

Though Tier 2 towns such as Pune, Kochi and Ahmedabad, to name a few, have grown strikingly over the past few years for these luxury car makers, Delhi and Mumbai continue to command the lion’s share of the sales pie. Hit by Covid-19, these two cities are among the worst hit in terms of demand for new luxury cars.

This is the second year in a row that the luxury car market is struggling with demand generation.  In 2019, one of the worst years for luxury car sales in India, the combined volumes of five players — Mercedes-Benz, BMW, Jaguar Land Rover, Audi and Volvo — fell to 35,274 units. This was a decline of 13 percent from the 40,340 units clocked in 2018.

But 2020 should end with no less than 30 new luxury car launches, including facelifts and variants, though companies say there are delays because of the Covid-19 disruption.

The Mercedes A-Class Limousine and EQC (electric car), BMW 2 Series Gran Coupe, Jaguar I-Pace, Audi e-tron, Audi Q3, Audi Q7, Audi Q2 are some of the models up for launch by December.

Ultra Rich

With demand for luxury cars at an all-time low, has demand for even more exotic cars disappeared altogether?

No, it hasn’t.

Dealers of exotic car brands such as Lamborghini, Ferrari, Bentley, and Rolls Royce still managed to strike deals with buyers during the last two months. At least one unit from each of these brands, costing more than Rs 3 crore, was sold every week in July and August, according to FADA data.

Five Lamborghinis and two units each of Ferrari, Bentley and Rolls Royce have been registered in the last two months.
Swaraj Baggonkar
first published: Sep 11, 2020 09:45 am

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