Market leader Mercedes-Benz performed poorly, reporting a growth of 1.3 percent to 15,538 units in 2018 as against 15,330 units sold in 2017.
Luxury car sales grew by 3.4 percent in 2018 hit by a week demand trend that had plagued the industry since the second half of last year.
Five manufacturers – Mercedes-Benz, BMW, Audi, Jaguar Land Rover, Volvo – clocked sales of 40,340 units during last year as compared to 38,989 units sold in 2017.
The growth has come on the back of a five percent increase in customs duty, price increase by the luxury car companies, tightened credit supplies, increased availability of used luxury cars and poorly performing stock market. The luxury car segment is already the highest taxed segment of the Indian auto industry.
Market leader Mercedes-Benz posted flat growth of 1.3 percent to 15,538 units in 2018 as against 15,330 units sold in 2017. This is the slowest growth in two years for the German heavyweight. The leader had cranked up sales in the October-December quarter to be in the black as sales during the previous nine months dipped by 0.6 percent to 11,789 units from 11,869 units clocked in the same period last year.
In a statement, Martin Schwenk, Managing Director & CEO, Mercedes-Benz India, said: "We are satisfied with our sales performance in 2018 despite facing strong macro-economic headwinds in H2, resulting in low consumer sentiment that posed significant sales challenges."
BMW finished 2018 with sales of 11,105 units (including 700 units of sold under the Mini brand), a growth of 13 percent over 9,800 units clocked in 2017. The Mini brand clocked a growth of 66 percent last year.
Audi, the Volkswagen-owned luxury brand, was the worst performer of the lot clocking 18 percent fall in sales to 6,463 units in 2018 as against 7,876 units sold in 2017. The brand with four rings blamed closure of its single largest dealer location in Delhi-NCR, supply constraint from its mother plant in Europe and product life cycle changes to the poor performance.
"We faced some unforeseen business challenges during the year, which led to reduced deliveries in 2018. The luxury segment was under pressure owing to financial market development, the changing customer sentiment and changes in policies", Rahil Ansari, head Audi India.
Audi is the only luxury car brand that has shown signs of a struggle in each of the last three years. Its numbers fell from a all-time high of 11,192 units clocked during 2015 to 7,876 units sold in 2017. In the first half of last year (Jan-June) Audi posted 11 percent decline in volumes to 3423 units as against 3831 units clocked in the same period in 2016.
Tata Motors-owned Jaguar Land Rover said it posted a growth of 16 percent in sales to 4,596 units in 2018 as compared to 3,954 units sold in 2017. Unlike its peers the two luxury brands do not have any compact models in its line-up.
Rohit Suri, President & Managing Director, Jaguar Land Rover India said: "The auto industry faced strong headwinds in 2018, especially in the second half with tight liquidity conditions, increased upfront insurance costs and increased lending rates. Despite that, the growth of Jaguar Land Rover in India has been very encouraging for us and we continue to focus on strong product launches."
Volvo, the Swedish luxury car brand posted the best growth clocking 30 percent more sales at 2,638 units during 2018 as compared to 2,029 units sold in 2017.This copy was updated on January 10 to reflect Audi sales volumes for 2018.