New Delhi: Luxury car buyers in India are getting younger with two out of five Audi buyers aged less than 40. At Mercedes-Benz India, buyers have an average age of 38 years, the youngest for the German luxury carmaker globally. The scenario is similar at BMW India where consumers aged 35-40 contribute bulk of the sales.
According to senior auto industry executives, the ‘YOLO’ (You Only Live Once) attitude in the aftermath of the pandemic has spawned a rise in the indulgence quotient in terms of buying luxury goods such as cars.
India’s changing corporate landscape has led to the emergence of a slew of young well-heeled professionals – doctors, lawyers, chartered accountants, and startup entrepreneurs. This has triggered a shift in sales away from the traditionally gilded business families for carmakers like Mercedes-Benz, BMW, Audi and Lexus over the last couple of years.
In fact, as much as a third of all luxury vehicles sold by BMW India is to a corporate professional currently, up from single digit tallies a few years back. BMW Group India president Vikram Pawah told ET that in the last one year itself, the customer profile has altered significantly. “The share of corporates is increasing (in sales). And within that too, few sectors such as startups are dominating.”
“Today, one out of every three vehicles sold is to the corporate sector (which includes salaried employees, professionals, start-up entrepreneurs). This was about 25% in CY2022,” Pawah said.
At Mercedes-Benz too, the proportion of sales to corporate consumers has doubled to 15% since 2021, with strong corporate earnings, hefty payouts on employee stock ownership plans (ESOPs) and a sustained recovery in economic growth since the pandemic putting more money in the hands of young achievers, Mercedes-Benz India managing director Santosh Iyer said. “The luxury car segment in India is evolving quickly,” Balbir Singh Dhillon, head, Audi India, said adding, “More young people, especially in the category of startup owners and young salaried professionals, are eager to experience luxury at an early age. They have both the desire and means for it with increasing disposable income.” The company garners about 40% of its sales from buyers below the age of 40.
Rising disposable income are also fuelling the surge in luxury car sales in India. Sales are expected to surge by more than a fifth to a record 45,000 units this calendar year.
Naveen Soni, president, Lexus India, said, “In the corporate segment, starting salaries are much higher today. The younger generation entering the workforce today are aspirational, their families already own houses. Anything they earn is adding on to their disposable income.” The age of the Lexus buyer in India at 45-50 years has come down by 3-4 years in the past two years. Lexus vehicles come at a price tag higher than their German counterparts starting at Rs 63.10 lakh (ex-showroom).
To be sure, business communities still chip in substantially to sales of luxury vehicles, said Iyer at Mercedes-Benz.
However, the customer mix has started changing, bringing down the average age of the Indian luxury car buyer.
“There are many more customers in the age group of 25-35 years buying our vehicles today. We have more salaried professionals buying our cars. In the corporate sector, a lot of MSMEs have started purchasing our vehicles as against businessmen, mostly real estate developers, who traditionally used to be our customers. This has brought down the average age of our buyer which is now 38,” Iyer said.
