Industry experts believe that the cumulative volume in 2022 will not touch the peak levels of calendar year 2018 when it recorded 40,340 unit sales.
According to Ravi Bhatia, President, JATO Dynamics, “The segment will not touch 40,000-mark this calendar year. Luxury car sales in the domestic market is expected to be around 35,000 units in 2022.”
Echoing a similar view, Puneet Gupta, Director, S&P Global Mobility, said, “For the calendar year 2022, the overall sales in this segment is not expected to touch the peak of 40,000-unit mark. As per our estimates, it is expected to be around 32,000 units.”
Even though the pandemic did not have a massive impact on the demand for luxury car sales in India, the challenge for these OEMs is longer waiting periods due to semiconductor shortages, he said.
This calendar year is going to be our best year ever as we are expecting to clock over 15,000 unit sales in 2022Martin Schwenk, MD and CEO, Mercedes-Benz India
Martin Schwenk, MD and CEO, Mercedes-Benz India, said, “This calendar year is going to be our best year ever as we are expecting to clock over 15,000 unit sales in 2022. Overall the recovery in the luxury segment is very positive for this year.”
India’s largest maker of luxury cars reported its best sales performance at 15,538 units five years ago.
Luxury car sales in India
Source: JATO Dynamics
Vikram Pahwa, President and CEO, BMW Group India, said that the company was at record levels up to August, and calendar year 2022 is expected to be its best-ever year. The company is confident of crossing the peak level sales of 2018 at 10,409 units.
“We have seen a rapid and robust return of demand since the pandemic settled in the country. The engagement and enquiry levels have increased, and this is just the pre-festive demand. Festive season is just around the corner and we expect it to be even stronger,” Pahwa said.
Talking about the overall luxury car market in India, he said, “The demand is definitely coming back to pre-Covid levels and if this continues, we may look at record levels in the industry in the years to come.”
The demand is definitely coming back to pre-Covid levels and if this continues, we may look at record levels in the industry in the years to comeVikram Pahwa, President and CEO, BMW Group India
Audi India witnessed 49% growth in H1 2022 compared to the same period of 2021. “We expect this upward trend to continue in the second half as well and expect to close with double-digit growth this year,” Balbir Singh Dhillon, Head, Audi India said.
However, the company’s sales volumes in the first eight months of the year at 2,341 units are far below its peak of 6,463 units in calendar year 2018.
According to Dhillon, the overall demand in the last few months has grown steadily and it is expected to continue with the upcoming festive season. This segment has not been untouched by the perils of COVID-19. Like the rest of the automotive industry, the luxury car segment is dealing with the on-going semiconductor shortage along with other supply chain constraints.
He added, “Post the pandemic, there is an increase in the purchasing power and the YOLO (you live only once) culture that is driving demand in this segment. The on-going and the upcoming festive season will further aid growth.”
Like the rest of the automotive industry, the luxury car segment is dealing with the on-going semiconductor shortage along with other supply chain constraintsBalbir Singh Dhillon, Head, Audi India
Tata Motors-owned Jaguar Land Rover (JLR) recently said that its sales continue to be constrained globally by the chip shortage and the impact of Covid lockdowns in China.
The Indian subsidiary of Swedish automaker Volvo Cars is expected to sell close to 2,000 units in the current calendar year, marking a growth compared to the last two years. But crossing its peak sales of over 2,500 units is not expected in 2022.
Currently, luxury car volumes account for less than 2% of the overall passenger vehicle sales annually. As per the ‘World Inequality Report 2022’, India is among the most unequal countries in the world, with rising poverty and an ‘affluent elite’.
The average national income of the Indian adult population is INR 2.04 lakh. Here, the bottom 50% earns INR 53,610 while the top 10% earns INR 11.66 lakh, over 20 times more. The report highlights that the top 10% and top 1% in India hold 57% and 22% of the total national income respectively while the share of the bottom 50% has gone down to 13%.
Top 10 luxury car model sales in 2022 (Jan-Aug)
Source: JATO Dynamics
The super luxury car segment, which clocks minimal volumes, is also positive on the outlook for the current calendar year. The sales volumes in this category are low but considered healthy given the fact that the on-road price range of its cars starts at INR 4 crore, and these are fully imported thereby attracting heavy taxes in the country.
Naveen Soni, President, Lexus India, said, “The luxury car market is on V-shaped recovery path with strong demand from the luxury consumers mainly attributed to change in consumer behavior, more successful start-ups, young affluent consumers, local production leading to a higher sense of value, and an increase in the number of HNIs.”
“While the demand is high and buoyant, we estimate it to be the best-ever for the luxury car segment, however there are challenges due to shortage of semiconductors and the dynamic geo-political situation around the world. It is early to say if this growth can be sustained,” he said.
Last month, Sharad Agarwal, Head, Lamborghini India told ETAuto, “We are positive about the growth momentum for this year. However, the segment is not growing to its market potential and the size of the segment does not fully reflect the kind of potential we have in the Indian market.”
Going forward, it would be worth noting when the luxury car segment overcomes all the odds to cross its peak sales in the domestic market.