Luxury car sales rise in India as the super-rich emerge from pandemic gloom
Porsches, Lamborghinis and Mercedes roar the streets of Delhi and Mumbai as demand for luxury cars rises in India, a sign of the country’s economy accelerating after the worst of its pandemic downturn.
India’s auto industry has been struggling for several years as higher costs, production cuts and the current global semiconductor shortage have driven sales down. But executives said purchases of premium cars and supercars, although relatively small by international standards, were approaching their highest domestic levels on record.
“On the luxury segment, we are really bullish at the moment,” said Gurpratap Boparai, managing director of Skoda Auto Volkswagen India, which also owns the local franchises of Porsche, Lamborghini and Audi. “These are the layers of society that have emerged from Covid faster than the others. ”
The turnaround is a sign of the recovery of the Indian economy as the number of Covid-19 cases declines and the increase in vaccinations leads to a rapid reopening. But it also underscores the uneven pace of the recovery, as India’s very wealthy – including business owners and those who invest in the vibrant stock market – have rebounded the fastest from the ravages of the pandemic.
“Most of our owners, and in particular the top of the range [vehicle owners], run successful businesses, ”said Martin Schwenk, Managing Director of Mercedes-Benz India. “They had very good profits and profitability. . . and it created a lot of confidence.
Sales of high-end luxury cars costing 20 million rupees ($ 267,000) or more were approaching all-time highs, executives said. They expect to sell around 280 cars in this category this year despite the sales disruption induced by the coronavirus, up from the record 325 in 2018.
Mercedes-Benz, many of whose vehicles start at around Rs4m, said it sold 4,101 vehicles in India in the quarter ended September, double its figure for the same period last year.
“Unlike last year, there has been no real reluctance” to start buying cars, ”said Schwenk, after the lockdowns in April and May were lifted.
The auto industry entered a deep contraction in 2019, as India’s economy slowed and changes in safety and fuel standards raised costs.
More recently, a global shortage of chips has hampered the supply of new vehicles. Although industry figures for September have not been released, India’s largest automaker Maruti Suzuki reported a dramatic drop for the month, selling just 63,000 passenger vehicles in the country, up from 148,000 Last year.
Many foreign car manufacturers have floundered in India. Ford announced last month that it would stop making cars in India and shut down local factories.
But luxury auto brands were more optimistic. Mercedes has launched several new models in the country this year, including the Maybach GLS SUV, which is priced over Rs24m. McLaren also launched in the country this year.
Boparai said he expected sales of his company’s low-end models, such as Skoda and Volkswagen, to take longer to recover.
But high-end auto buyers were less price sensitive, according to industry figures. Imported luxury cars are already subject to 100% tariffs, putting them out of reach of all but the richest in India.
Boparai said the growth of the market indicates the rise of an Indian business elite who are more confident and more willing to indulge in luxury brands.
“The younger generation is less reluctant to spend. India followed the socialist development model [before]. Conspicuous consumption was looked down upon, ”he said. “We have deviated a lot from that mindset.”