Sales of luxury passenger vehicles grew faster than the local automobile market last year, nearing the pre-pandemic peak, on the back of a quick economic revival and reaffirming India’s credentials as the world’s fastest-growing major economy at a time when much of the West is beset with recessionary risks.
As per industry estimates, about 37,000-38,000 luxury vehicles were sold in India in 2022, an increase of around 50% from the year before but missing the all-time high of around 40,000 units in 2018. Sales in the mainstream segment grew 23% to 3.79 million units last year, with vehicles priced upwards of ₹10 lakh accounting for 41% of the volume.
Within the luxury segment, too, demand strengthened for pricier vehicles, or models priced above ₹1 crore, supported by higher disposable incomes, said senior industry executives.
The top three luxury automobile manufacturers – Mercedes-Benz, BMW and Audi – all posted strong growth.
‘Expect the Momentum to Continue’
For Mercedes-Benz and BMW, 2022 sales were their highest on record. Volvo, Lexus and Jaguar Land Rover are the other major brands in the Indian market.
“We posted our best-ever sales to increase our share in the domestic luxury vehicle segment last year,” said Santosh Iyer, managing director at Mercedes-Benz India that sold 15,822 vehicles in 2022.
The sales last year topped the German automaker’s previous record high of 15,538 units in India in 2018 and were 41% higher than the 2021 volume. During the year, it held more than half the market share for luxury vehicles.
Mercedes-Benz currently has pending orders for 6,000 vehicles in India, with a waiting period of four to nine months.
A healthy revival in the economy, coupled with strong corporate earnings-supported demand, especially at the higher end of the segment, drove sales, Iyer said. “We have seen phenomenal growth, with sales at the top end growing by 69% last year. We expect the momentum to continue and grow sales in double-digits in the ongoing calendar year.”
Also, the luxury-car buyer is getting younger in India. At Mercedes-Benz, the average age of the S-Class customer is now 38 years, while that of the C-Class buyer is 35 years, compared with 45 years half a decade ago.
Participation of salaried professionals and female buyers, too, has been increasing – they accounted for 12% and 15% of sales, respectively, in 2022, compared with under 5% for both groups five years ago.
Iyer, who spoke on the sidelines of the launch of the Mercedes-Benz AMG E53 Cabriolet priced at Rs 1.3 crore (ex-showroom), said the company has scheduled 10 new models for launch in 2023, even as it is trying to increase production and reduce the waiting period for customers to two-three months in the near term.
At BMW India, sales rose 35% in 2022 when it sold a record 11,981 cars.
The potential for luxury carmakers in India is promising, given that it is among the countries with the highest number of billionaires but the share of luxury vehicles in the automobile market at under 2% is among the lowest among major economies, Vikram Pawah, BMW Group India’s president, told ET in a recent interaction.
Audi India’s sales rose 27% to 4,187 units in 2022. Balbir Singh Dhillon, its country head, is confident of a strong performance in the coming months on the strength of its portfolio, including for its performance and electric cars.