New Delhi: The rush for new car launches continues with all the world’s automakers wanting to be in India. Despite market and fuel price uncertainties, automotive growth rate remains impressive.
Murad Ali Baig, auto expert and columnist
1.55 million passenger vehicles (including 334,000 UV’s and SUV’s) were sold in India last year representing a growth of 12% over 2006-07. Although hatchbacks commanded bulk of the sales, the luxury segment is registering nearly 100% growth rate. Cars in this category which on an average cost over Rs25 lakh sold 3,200 cars in 2006 and 4,300 in 2007 and are likely to cross 8,000 units in 2008.
German brands like Mercedes-Benz, BMW and Audi dominate the luxury car segment worldwide. They also own some of the best known super luxury brands. BMW owns Rolls-Royce, Volkswagen has Bentley (and also Audi) while Mercedes has had to create a new super luxury brand with the Maybach.
Together, they command about 80% of the world’s luxury brands that include popular cars like Lexus, Porsche, Jaguar and Volvo. There is also a smaller but lucrative market for costly sports car models like the Porsche, Ferrari, Lamborgini, Bugatti and several smaller special brands.
Manufacturing plants come up in India
In India, Mercedes-Benz had set up a manufacturing plant in Pune in 1996 and has long been the unchallenged leader for upwardly mobile Indians seeking a luxury car. They are now facing stiff competition after BMW who set up an assembly plant near Chennai in March 2007. Audi is following suit and will be assembling their new A4 and A6 models at the Skoda plant at Aurangabad (also owned by VW) before shifting to Pune, at the biggish Volkswagen plant that is slated to come up.
Mercedes assembles C Classe, E Classe and S Classe saloons while BMW assembles the competing 3 Series and 5 Series models and imports the & Series. Local assembly brings down taxes but all three automakers sell their more expensive imported luxury models like the 7 Series BMW as well as their luxurious SUV’s and sports coupes.
Imports from luxury automakers
The rapid growth in India’s luxury segment is attracting imports from other luxury automakers, even though they do not expect to have volumes that can justify local assembly. Porsche plans to sell 400 Cayenne SUV’s and Carerra or Boxter sports cars this year while Volvo aims to sell 500 of its XC90 SUV’s and S80 saloons. In addition there are several high end cars from Lamborgini, Land Rover and Volkswagen to tempt the rich. Post Tata Motors bringing in Jaguar, we can confidently expect a few hundred Jaguar models to be running on India’s roads, within the year.
Growing interest in super luxury brands
According to car dealers there is growing interest in super luxury brands like Bentley, Rolls-Royce and Maybach that cost more than three times the cost of the top luxury brands.