Upsurge In Elegance
Indians are buying luxury cars like never before. A good majority of these are folks from the heart of India, the new centres of growth and progress outside the metros. And they are eager to announce their new-found economic and social status typically with gaadi (vehicles) and bungla (homes) of their choice. These folks are ready to splurge on the good things of life, fuelling an ever-increasing consumption of high-end goods and services. Thanks to these as well as a steady pipeline of cutting-edge, high-tech models, the year 2023, especially the first half, has been nothing short of spectacular for the luxury carmakers.
Every luxury car manufacturer has witnessed substantial year-on-year growth, presenting a picture of overall growth and prosperity. In the initial half of 2023, the industry marked an extraordinary milestone by selling a remarkable 21,000 luxury cars in India. It represents a remarkable 16 per cent increase compared to the entire 2022, and an even more impressive 7 per cent growth over the peak sales recorded for the same period in 2018.
The luxury car industry has had an uneven but rich history in India. It enjoyed robust double-digit growth between 2008 and 2014, laying the foundation for the grandeur that was yet to come. However, after this golden period, it had somewhat languished, selling less than 40,000 units per year.
Historically, the second half of the year, encompassing the festive season, has been the driving force behind the annual sales growth. But this year, something extraordinary has occurred -- a formidable first half that has raised the bar. The remarkable showing in the first half of 2023 has ignited hopes and expectations of the industry not just revisiting the zenith it once touched but perhaps even surpassing it. The tantalising prospect of reaching 45,000-47,000 units by the end of the year beckons, painting a picture of prosperity and abundance.
Robust Sales in H1 FY23
Mercedes-Benz India, a beacon of automotive luxury, has proudly unveiled its impressive performance for the first half of 2023. During this period, the company delivered a dazzling 8,528 units to discerning customers across the nation. What's even more impressive is the demand for their elite vehicles, those with a price tag of Rs 1 crore or more, which has surged to a stunning 54 per cent. The brand's best-selling models, the Mercedes-Benz E-Class sedan and the GLE SUV, continue to capture the hearts of Indian buyers, setting the standards for luxury and performance.
BMW Group India, a symbol of German precision and craftsmanship, has continued to establish itself as a formidable player in the luxury car market. In the first half of 2023, the company proudly announced the sale of 5,867 units. This impressive number encompasses 5,476 units of BMW, marking a commendable 5.5 per cent year-on-year growth, and MINI's 391 units, exhibiting a noteworthy 3 per cent year-on-year expansion. Notably, SUVs have emerged as the stars of BMW's Indian portfolio, contributing to over 50 per cent of the company's overall sales. Among them, the X1 has risen as the undisputed champion, resonating with the Indian clientele's preferences.
Audi India, another stalwart in the world of luxury automobiles, has charted an extraordinary journey in 2023. During the January to June period, the company delivered a commendable 3,474 cars, recording an astonishing 97 per cent year-on-year growth. The company's trajectory looks set to continue its upward arc with the soon-to-come launch of the Q8 e-tron.
Volvo Car India, with an impressive 33 per cent year-on-year growth, has established itself as a formidable contender, having dispensed 1,089 cars in the initial half of 2023. Their XC60 SUV has garnered a dedicated following, earning the distinction of being the company's best-selling model in India.
"The market showed consistent demand for luxury cars and SUVs, signifying a robust consumer appetite for premium segments," says Manish Raj Singhania, President, Federation of Automobile Dealers Associations (FADA). "The segment also witnessed the benefit of good pending bookings and the launch of promising products, laying the groundwork for potential growth in the upcoming festive season," Singhania adds.
Players Speak
Balbir Singh Dhillon, Head of Audi India, aptly captures the jubilant mood in the luxury car segment. He states that the luxury car segment has grown a remarkable 16 per cent in the first nine months of 2023. Audi India, on the other hand, has witnessed an incredible 88 per cent growth during the same period. The figures are staggering, with Audi India delivering a remarkable 5,530 units in the first nine months of 2023. Notably, in the third quarter alone, the company found new homes for 2,056 units, fuelled by favourable economic conditions, the ever-evolving customer demographics, the allure of new launches, and the enduring demand for existing models. The SUV range of Audi India has witnessed an extraordinary surge of 187 per cent in the first nine months, while performance and lifestyle cars, including the e-tron range, have followed suit with a commendable 42 per cent growth in the same period. Dhillon exudes confidence, stating, "We are on a growth path -- a sustainable, profitable business is our strategy, and we expect to close the year with high double-digit growth."
Mercedes-Benz India, undeterred by challenges, has continued to chart an impressive trajectory in the domestic market. For the January-September period of the illustrious calendar year 2023, the company has announced an 11 per cent year-on-year growth in retail sales. This achievement is a reflection of the remarkable success of key models like the C-Class, E-Class, GLC, and GLE, contributing to the sale of 12,768 units during the initial nine months of CY23. This represents an impressive year-on-year growth of 11.33 per cent compared to the 11,469 units sold during the corresponding period in the previous year. It's worth noting that this growth was achieved despite the constraints posed by supply challenges, which impacted the availability of key SUVs like the GLA, GLC, and GLS in the September quarter.
Santosh Iyer, Managing Director and CEO of Mercedes-Benz India, encapsulates the brand's remarkable journey, stating, "Strong desirability for Mercedes-Benz cars buoyed our January-September sales momentum." Despite supply chain challenges impacting the availability of new products like the GLC, Iyer expresses his enthusiasm, declaring, "We are excited that Mercedes-Benz remains the most desirable luxury brand in India, and we are doing everything possible to fulfil our customers' expectations and wishes."
BMW Group India, the epitome of German precision and luxury, has notched up a remarkable 10 per cent rise in total car sales, tallying an impressive 9,580 units in India during the initial nine months of 2023. Says Vikram Pawah, President, BMW Group India, "After the best-ever first half in our history, quarter three has been even more promising." The strategic planning for 2023 bore fruit, with the launch of new models and the ramping up of supply chains during the second half of the year. Pawah leaves no room for doubt, declaring, "It will be absolutely a record year, that's what we expected when we started the year. It's purely delivering that." The reasons for this optimism are clear -- robust demand and improving supply situations. A solid double-digit growth by year-end is firmly expected.
The luxury car market in India is currently experiencing unprecedented growth and prosperity. With increasing disposable incomes, evolving consumer preferences, and the introduction of high-tech models, this segment is reaching unprecedented heights. Leading brands like Mercedes-Benz, BMW, Audi, and Volvo have recorded substantial year-on-year growth, reflecting the enduring appeal of luxury vehicles in India.
The future of the luxury car market in India looks promising, with the potential to surpass previous records and continue its ascent. As these brands continue to redefine opulence and elegance on Indian roads, the journey of luxury in India is set to be even more captivating and exciting.
