In 2024, the Indian luxury car market is poised to surpass the 50,000-unit sales mark for the first time, with key players aiming for robust double-digit growth.
Record-breaking Performance in 2023
The luxury car market experienced unprecedented growth in 2023, surpassing the mainstream car market with a growth rate exceeding 20 percent. Total volumes soared to approximately 47,000 units, marking a new peak.
Mercedes-Benz India achieved its highest-ever annual sales in 2023, selling over 17,400 units and achieving a growth rate of 10 percent. Santosh Iyer, MD of Mercedes-Benz India, expressed optimism for continued double-digit growth in 2024.
BMW India witnessed an 18 percent surge in sales, reaching 14,172 cars, with all three BMW Group brands recording their highest-ever sales in India. Audi India also experienced substantial growth, nearing its previous sales peak with an almost 90 percent increase.
Driving Factors: Rising Affluence and Changing Demographics
The booming luxury car market reflects the growing appetite for luxury and exclusivity among Indian consumers. The increasing number of high net worth individuals, which currently stands at around 3.5 lakh, coupled with robust spending habits, has propelled the segment forward.
Shift in Buyer Demographics
Notably, the age of luxury car buyers in India is decreasing, mirroring the trend of a younger population. For instance, Mercedes-Benz observed a significant decrease in the average age of buyers for its top-of-the-line vehicles.
Segment-specific Growth and EV Penetration
In the segment priced above Rs 1 crore-1.5 crore, both BMW India and Audi India experienced substantial growth. Unlike the mainstream market, luxury carmakers in India have achieved higher penetration in the EV segment, benefiting from a diverse range of models and an expanding network of fast-charging stations.
Expansion Strategies and Investment Plans
Luxury carmakers are actively expanding their portfolios and networks to capitalize on the growing market. Mercedes-Benz plans to increase its capacity and invest in additional workshops across new cities. Similarly, BMW Group India aims to expand its touch points to enhance its presence nationwide.
Export Potential from India
As the Indian luxury car market continues to grow, companies are exploring the possibility of exporting premium vehicles from India. Mercedes-Benz has already exported SUVs to Europe, showcasing the quality of cars manufactured in India. This trend signals opportunities for the Indian automotive industry to become a global manufacturing hub.