Home / Companies / News /  Luxury cars witness swift, steady rise in demand post second wave

A spurt in demand for luxury cars has taken manufacturers by surprise, especially since the country is still recovering from the devastating second wave of covid-19 that began in April.

Mercedes-Benz India, the largest luxury carmaker in the country, has witnessed a quicker recovery after the second wave, compared with the one witnessed last year. Others, too, are witnessing a similar trend, seeing orders piling up even as deliveries take longer than usual due to a global shortage of semiconductors. Some of the high-end Mercedes-Benz products such as the S-class, GLS and AMG series are almost sold out for the entire year and the company can only deliver the new orders by December or January next year.

Volkswagen-owned Audi has also been reporting sequential growth in sales and bookings across its product portfolio, after its dealerships reopened with the easing of restrictions. The company plans to achieve the pre-second wave level of vehicle sales by the end of the current quarter.

According to Santosh Iyer, vice-president, marketing and sales at Mercedes- Benz India, in the 1 crore and above segment, demand has not only come back but it is one of the highest ever the company has witnessed for AMGs, Maybachs, GLS-es or other cars.

“Our customers run large business houses and work in large corporates, and results (earnings) have been very good despite the pandemic and future expectations are also positive. The stock market has also been reflecting the sentiment. That gives these buyers a lot of confidence to indulge in luxury products. Corporate India has also lowered its debt and that gives them more risk appetite. That explains the big growth in the super-luxury segment," said Iyer.

Besides the high-end products, Mercedes now has a waiting period of almost four weeks for its other vehicles such as E-Class sedan and GLE, added Iyer.

The demand, though, comes at a time when production schedules of automakers across segments are impacted by the shortage of semiconductors and shipping containers. Hence, deliveries are likely to get delayed and some customers might also postpone their purchase plans. Most luxury vehicle makers expect substantial growth during the festive season—if the covid pandemic does not return to disrupt businesses again.

“Audi India has witnessed steady growth in the last six months. Specific to the June and July quarter, there has been growth, and we are expecting this to continue with the upcoming festive season. The reopening of our touchpoints since the easing of restrictions combined with the engagement and sales leads from our digitalization strategy are the factors driving this growth in demand," said Balbir Singh Dhillon, head of Audi India.

He added that the company’s Audi A4, Audi A6, Audi Q2, and Audi Q8 are witnessing robust demand and continue to be its best-selling models. Despite the severe impact of the second wave, luxury vehicle manufacturers reported better sales in the first half of this calendar year compared with the corresponding period last year.

“The market recovery this year is much faster than last time," Iyer of Mercedes-Benz said.

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