Luxury car firms bet on demand revival, plan slew of launches
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Mumbai: Luxury car buyers in India will be spoilt for choice in the coming months as more than two dozen new models, including some refreshes, are likely to hit the roads as companies expect faster growth.
Sales of luxury cars in the country slowed over the past three years, which were marked by a ban on the sale of diesel cars in Delhi in 2015 and the demonetisation of high-value banknotes in November 2016. In 2016, sales contracted 4.24% from a year earlier to 33,279 units according to market researcher IHS Markit.
The firm estimates that the market will expand by more than 10% in 2017, the fastest in three years, and 42% and 21% in 2018 and 2019, respectively.
Executives at most luxury car firms said the three months ended 31 March have been encouraging, an indication of the trend ahead.
Audi India Pvt. Ltd, once the market leader, sold around 7,800 units in 2016, 30% lower than the 11,192 a year earlier. The firm plans to change that this year. “Clearly, 2017 is the year of Audi reloaded and we will come back much stronger in the years to come than anyone would expect,” said Rahil Ansari, head, Audi India.
Audi has achieved more than what it expected in the first quarter, Ansari said, without disclosing details. Earlier this month, Audi launched a face-lift of the A3—a premium sedan. The A3 is one among four models the company has launched so far this year. It plans to bring six new models by the end of the calendar year in a bid to regain the pole position in India.
Meanwhile, market leader Mercedes Benz India Pvt. Ltd said on Tuesday that the three months to March were its best ever. Besides the new E-Class and the strong sales momentum of its SUVs, a revival in market sentiment has boosted sales, the car maker said.
Mercedes sold 3,650 units in the January-March 2017 period, an increase of 1% from the same period a year earlier. Although Delhi and Mumbai continue to be the company’s key markets, non-metro markets have also contributed to sales volume, said Roland Folger, managing director and chief executive at Mercedes.
Tom von Bonsdorff, managing director and chief executive at the local arm of Swedish luxury car maker Volvo Auto, was equally bullish. “We are very happy with the early double-digit growth in the first quarter and expect a similar trend for the rest of the year.” he said, without divulging the number of units sold. Besides positive sentiments, the new models launched in the last couple of years helped, he said, pointing to the S90 model.
Volvo plans to launch two completely new models including the Polestar S60 performance car, on 14 April and the V90 Cross Country premium SUV later this year.
BMW India Pvt. Ltd plans to launch a new generation of the 5 Series, its flagship model, later this year. The company will make an announcement regarding its India strategy and new model plans next month, a spokesperson said. BMW sold 7,500 units in 2016, as against 6,550 in the previous year, he said.
Tata Motors Ltd-owned Jaguar Land Rover has lined up 10 launches for this year, including the new Land Rover Discovery, Range Rover Velar and Jaguar XE diesel, PTI reported on 12 April, citing Rohit Suri, managing director and president at JLR India.
Even though luxury cars account for less than 1% of total car sales in India, the market is attractive for global luxury firms. The number of super-wealthy Indians grew at the sixth-fastest rate in the world between 2015 and 2016, according to a 2 March Wealth Report by Knight Frank, a global property consultant.