The celebrity or young achiever’s image seems to demand a passion for superbikes, luxury and sports cars. The adrenalin rush that these mechanical beasts unleash, or the comfort luxury cars provide, is something that money can buy.
Take, for instance, Ranveer Singh, the Bajirao Mastani and Band Baaja Baaraat star. He likes luxury cars. “Every two-three years, I like to buy a car. I want the back-seat experience while travelling in Mumbai because the way the traffic and road situation is, it doesn’t make sense to buy a sports car. And most of the time I am in the back seat completing work while travelling from point A to point B. So for me it is important that there is a luxury sedan with a very good back-seat experience—sort of a chauffeur-driven big car,” says Singh.
At present, he owns a Jaguar XJ Ultimate, which was priced at Rs.1.78-1.87 crore (ex-showroom Mumbai) when it launched in 2013 in India.
Actor Emraan Hashmi owns a BMW 5 Series, a BMW 8 Series and an Audi Q7, in the range of Rs.55 lakh to Rs.2.2 crore. He likes sports cars but he has never bought one “because the roads in Mumbai are not great for it”.
It is not just celebrities, erstwhile royals and industrialists who buy luxury products, even young entrepreneurs do. “The aspiration of thousands of young entrepreneurs beats in the centre of emerging India and has fuelled the luxury market in the country,” says Frank Emanuel Schlöder, acting president of BMW’s India unit. “They are young achievers predominantly from tier I and tier II cities who have a dynamic attitude and are technology-savvy. With the rise in disposable income, they are not hesitant to spend on luxury products and services. Luxury for them is an indulgence and they want to associate with top brands to make a statement or simply to reward themselves for their achievements,” he says.
Till a decade ago, Schlöder says, owning a luxury car was seen as a symbol of ultimate success. “It remains so even today but is no longer seen as a reward at the end of a highly successful career. In fact, it now denotes ‘the starting steps to success’,” Schlöder says, adding that Indian luxury consumers are very demanding compared to their European counterparts. “They are sophisticated, discerning and have very high expectations when it comes to a luxury purchase.”
Luxury vehicle sales in 2015 rose 6.4% year on year from nearly 33,200 units sold in 2014, according to IHS Markit, a sales forecasting and market research firm, formerly called IHS Automotive. Sales are expected to more than double in the next five years, according to a forecast from IHS Automotive in February. In 2015, luxury vehicle sales in the Indian market stood at nearly 35,300 units. This is expected to grow to 87,300 units by 2020, with significant volumes being added by existing players, apart from new entrants like the Lexus, Infiniti and Genesis brands.
At present, the Indian luxury-car market is dominated by Mercedes Benz India Pvt. Ltd, Audi India Pvt. Ltd and BMW. According to IHS Automotive forecasts, the market will see more luxury brands in the next five years even though the traditional leaders are expected to maintain their lead.
Celebrity owners of luxury vehicles add aspirational value to the market, creating a “pull factor”, say analysts. “These products have always been around but how many times have we had an example of someone from among us like M.S. Dhoni; he was a commoner. Such examples raise the aspirational value of these products,” says Anil Sharma, principal analyst at IHS Markit.
When it comes to cars, Dhoni, the Indian team’s skipper in limited-overs cricket, has a soft spot for big burly SUVs. According to Zigwheels.com, Dhoni paid over Rs1 crore for the Hummer H2, which is the most expensive car in his collection. Other cars in Dhoni’s collection include the Land Rover Freelander, Audi Q7 and Mitsubishi Pajero.
Dhoni also loves motorcycles—he owns a fleet of 33, says actor John Abraham, who is himself a motorcycling fan and is known to own a set of high-end Yamaha bikes. “He (Dhoni) is so passionate, and in Ranchi, he has the space to keep them also.” Abraham says.
Vikram Pawah, managing director, Harley-Davidson India, says that the demand in this segment is fuelled by passion. “Additionally, a growing working population, improved road networks across the country and rising aspirations of people have also led to a gradual upsurge in leisure motorcycling, particularly in the tier II cities,” Pawah adds.
While a vehicle is, by its very nature, a depreciating asset, the value that someone derives from owning or driving a particular vehicle cannot be measured. “It is an intangible phenomenon. There is no way you can equate it with a certain sum of money,” says Sharma.