Luxury cars fly in ‘ recession- hit’ India

The Luxury car market in India is growing like never before. Sample this: In the first six months sales of luxury cars have almost doubled.

Mercedes

Mercedes India has sold 1,892 cars in the country compared to 2,491 cars sold last year.

BMW

BMW has sold 1,323 cars in the first five months, which is almost equal to the 1,387 cars the company sold during the full last year.

Volkswagen

The Volkswagen group has managed to sell 810 premium cars of its two brands Audi (470 units) and Volkswagen (340 units).

Audi

And Porsche is aiming to double the tally of its car sales this year by selling over 200 premium cars.

Clearly, financial sector meltdown and the consequent wealth erosion hardly seem to be dissuading buyers of high-end cars in India, even as the global luxury car makers pump in huge resources to lure the Indian customers.

“If you look at the segment we are operating in, price sensitivity of the product is not an issue,” says Kurt Rippholz, head, communications, Volkswagen India.

To this Dr. Wilfried Aulbur, chief executive officer and managing director, Mercedes India, adds, “Back in 1995 when we started operations in India, we were optimistic about the potential that India held and we are now convinced about it.” And why not?

According to the 2008 Wealth Report by Merrill Lynch Cap Gemini there are around 1,23,000 millionaires in US dollar terms in India. Also, the country has a significant number of young, rich and enterprising people in smaller cities who are spoilt for choice. And manufacturers are strutting their products to lure them.

Bentley

So, the top- end luxury cars such as Bentley and Lamborghini, which cost upwards of Rs 2 crore, and that can only sell around 25 and 10 cars, respectively, for exclusivity sake, have industrialist buyers queuing up — for four to six months — to get their cars. But it’s the entry- and mid- segment luxury cars that are selling like hot cakes among the class aspirants.

Lamborghini

This year till June, Mercedes sold 1,000 C-Class cars ( Rs 25 lakh onwards). In fact, in March alone, it sold over a 100 Mercedes S-Class cars ( Rs 70 lakh onwards).

Maybach

BMW sold 666 cars of its 5 Series and 355 units of its Series 3 cars upto end- May this year.

BMW

Last year Audi sold 107 units of its Q7 model while Porsche sold around 90 cars of its Cayenne model. “Along with corporate sales that are pushing the sales of these premium cars, aspirational sales are fast picking up.

Interior of a Rolls Royce

Professionals in their thirties who have a global lifestyle and hail from smaller towns are the main customers in this segment,” says Aulbur. And to sell these new cars, companies are expanding their distribution network thick and fast. New dealerships are being set up in Tier II, III cities.

There is a sizeable population of Mercedes cars in cities such as Kolhapur, Ludhiana, Madurai, Coimbatore and Kochi.

Volkswagen, in its second phase of expansion opted for cities such as Hyderabad, Chandigarh and Ludhiana for their dealerships and Porsche is looking at potential new dealerships in Punjab. “We are trying to have 120 distribution dealerships in the next three years as we expect a growth of 250 per cent in the Indian auto market over a period of ten years,” says Kurt. And he is not alone; Audi is planning to take the tally to 11 dealerships from the existing seven by the end of the year.

Porsche

Porsche is looking at having nine dealerships by 2010 from the current two and is also looking at building a steady relationship with Indian customers. So, it’s zip, zap zoom time ahead for the luxury car market in India.