Luxury car makers are lowering the entry barrier to Rs 20-25 lakh and lining up nearly half a dozen launches in the premium segment to draw in India’s rich and rev up volumes.
With the number of high networth households in India is set to rise further, industry experts expect over 300,000 vehicles priced above Rs 20 lakh to be sold in the country by the end of the decade.
With the number of high networth households in India is set to rise further, industry experts expect over 300,000 vehicles priced above Rs 20 lakh to be sold in the country by the end of the decade.
Take the case of Mercedes Benz, which was the luxury car market leader till a few years ago in India. The German auto maker has firmed up plans to launch a new B Class Sports Tourer in September. A compact A Class car and a premium sports utility vehicle GLC, aimed at taking on BMW X1 and Audi Q3, would follow over the next two years. All three cars are expected to be tagged between Rs 20-25 lakh, lowering the price barrier for brand loving consumers.
Mercedes’ cheapest offering, the C Class sedan, is currently priced upwards of Rs 31 lakh (ex-showroom Delhi). BMW and Audi had already read the cues and introduced the X1 (Rs 22.40 lakh) and Q3 (Rs 26.21 lakh ), respectively, in the Indian market.
The Indian luxury car market which witnessed scorching growth rates of 70-80 per cent in 2010, increased by a modest 10 per cent in the first six months of 2012.
Overall, the sale of all vehicles priced above Rs 20 lakh (which includes premium offerings such as Toyota Fortuner, Honda Accord, Skoda Superb, among others) had increased 27 per cent to 32,764 units in 2010-11. Volume growth in the category moderated to 10.5 per cent at 11,627 units in the first quarter of this financial year.
“It’s not only the mass segment that has been hit by the rise in interest rates, excise duties and fuel prices,” said Debashis Mitra, director (sales & marketing), Mercedes Benz India.
“Our customers are senior corporate executives and entrepreneurs. With the macro-economic conditions affecting industries across sectors, consumers are going in for cost-cutting exercises and postponing purchase decisions,” he added.
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