India: Big business for luxury car manufacturers

Posted on Jun 22, 2011 by
Rolls Royce Showroom India

The Rolls Royce Showroom in New Delhi, India

The Indian market might be a hub for compact and sub-compact cars but in this season of global economic turmoil, the world’s elite carmakers have turned to India for boosting sales of their super-luxury sedans and exotic sports cars.

It comes as little surprise that the demographics of a country as large as India, home to over 1.1 billion people is as diverse as the ingredients that go into one of their curry making sessions. The World Bank Report suggests that an estimated 80% of the population survives on as little as US$ 2.00 per day, meanwhile the country harbors the largest community of billionaires outside the United States.

In recent months, we have seen car launches in India gather pace and without doubt in the near future both Global and Indian launches will be within 24hours of each other. This is a sign of commitment to the Indian market. In addition to this, renowned European manufacturers like Mercedes-Benz, BMW, Porsche and Bentley have set up manufacturing plants in India. Ferrari and are obliged to follow suit.

Asia’s other economic imperium, China is already viewed as a much larger market for luxury vehicles with alone seeking to sell three hundred thousand cars. But unlike its neighbour, India faces fractured road networks, mixed tarmac conditions and high tax propositions on foreign cars, in spite of which the luxury market grows at 30% annually, says Mumbai based auto researcher Jatin Chawla.

Aston Martin Rapide India Launch

The launch of the 4-door Rapide in India

Aston Martin’s global director Bill Donnelly stated that the Indian market has attained sufficient critical mass to make two Aston Martin dealers selling their cars in India a financially viable proposition. Lalit Choudary, the appointed dealer in Mumbai plans to sell about 100 cars a year by 2015.

Interestingly, few luxury car companies are looking to forge their brand image through Bollywood. The country’s film industry is being used as platform to introduce the car manufacturer themselves as well as the products they offer. 3 idiots starring Aamir Khan featured the Volvo XC 90.

Sale of luxury cars are expected to be less than 1% of total new car market but the simple fact that by having Aston Martin’s US$ 4.5 million One-77, Bugatti’s US$3.6 million Veyron and the “cheaper” Rolls Royce Phantom and Mercedes Maybach on display in showrooms indicate that manufacturers are convinced that there is a substantial market consisting mostly of business tycoons and royality who would shell out top dollar to make social statements.

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