Industry experts assume that the cumulative volume in 2022 will not reach the peak values of calendar year 2018 with 40,340 units sold.
According to Ravi Bhatia, President of JATO Dynamics, “The segment will not exceed 40,000 this calendar year. Sales of luxury cars in the domestic market are expected to be around 35,000 units in 2022.”
Similarly, Puneet Gupta, Director, S&P Global Mobility said: “For calendar year 2022, total sales in this segment are not expected to reach 40,000 units. According to our estimates, it will be around 32,000 units.”
While the pandemic hasn’t had a massive impact on demand for luxury car sales in India, the challenge for these OEMs is longer wait times due to semiconductor shortages, he said.
This calendar year will be our best year ever as we anticipate over 15,000 units sold in 2022Martin Schwenk, MD and CEO, Mercedes-Benz India
Martin Schwenk, MD and CEO of Mercedes-Benz India said: “This calendar year will be our best year ever as we anticipate over 15,000 units sold in 2022. Overall, the recovery in the luxury segment is very positive for us this year.”
India’s largest luxury car maker reported its best sales performance five years ago with 15,538 units.
Selling luxury cars in India
Source: JATO Dynamics
Vikram Pahwa, President and CEO of BMW Group India said the company was at record levels through August and calendar 2022 is expected to be its best year ever. The company is confident of surpassing the 2018 sales peak of 10,409 units.
“We have seen a rapid and robust return in demand since the pandemic took hold in the country. Engagement and inquiries have increased, and that’s just the pre-Christmas demand. The holiday season is upon us and we expect it to get even stronger,” said Pahwa.
Speaking of the overall luxury car market in India, he said: “Demand is definitely returning to pre-Covid levels and if this continues we may see record levels in the industry in the years to come.”
Demand is definitely returning to pre-Covid levels and if this continues we may see record levels in the industry for years to comeVikram Pahwa, President and CEO, BMW Group India
Audi India recorded growth of 49% in the first half of 2022 compared to the same period of 2021. “We expect this upward trend to continue in the second half and end this year with double-digit growth,” Balbir Singh Dhillon, Head said Audi India.
However, the company’s sales of 2,341 units in the first eight months of the year are well below the peak of 6,463 units in calendar year 2018.
According to Dhillon, overall demand has been growing steadily over the past few months and this is expected to continue as the holiday season approaches. This segment has not been untouched by the dangers of COVID-19. Like the rest of the auto industry, the luxury car segment is struggling with ongoing semiconductor shortages and other supply chain constraints.
He added: “Post-pandemic, there is an increase in spending power and YOLO (You Live Only Once) culture driving demand in this segment. The current and upcoming holiday season will continue to support growth.”
Like the rest of the auto industry, the luxury car segment is struggling with ongoing semiconductor shortages and other supply chain constraintsBalbir Singh Dhillon, Head, Audi India
Tata Motors-owned Jaguar Land Rover (JLR) recently said its global sales continue to be constrained by chip shortages and the impact of the Covid lockdowns in China.
The Indian subsidiary of Swedish automaker Volvo Cars is expected to sell almost 2,000 units in the current calendar year, a growth compared to the last two years. However, peak sales of over 2,500 units are not expected to be exceeded in 2022.
Currently, luxury cars account for less than 2% of total passenger car sales annually. According to the “World Inequality Report 2022”, India is among the most unequal countries in the world, with increasing poverty and a “wealthy elite”.
The average national income of the Indian adult population is INR 2.04 lakh. Here the bottom 50% earn INR 53,610 while the top 10% earn INR 11.66 lakh, over 20 times more. The report highlights that the top 10% and top 1% in India hold 57% and 22% of total national income, respectively, while the share of the bottom 50% has fallen to 13%.
Top 10 Luxury Car Model Sales in 2022 (Jan-Aug)
Source: JATO Dynamics
The super luxury car segment, which has a low volume, also sees the prospects for the current calendar year as positive. Sales volumes in this category are small but considered healthy given that road cars start at INR 4 crore in price and are fully imported, resulting in high taxes in the country.
Naveen Soni, President of Lexus India, said: “The luxury car market is on a V-shaped recovery path, with strong luxury consumer demand mainly driven by changing consumer behavior, more successful start-ups, young affluent consumers and leading local manufacturing to a higher sense of worth and an increase in the number of HNIs.”
“Although demand is high and buoyant, we estimate it to be the best ever for the luxury car segment, however, there are challenges due to the semiconductor shortage and the dynamic geopolitical situation around the world. It’s early to say if this growth can be sustained,” he said.
Sharad Agarwal, Head of Lamborghini India, told ETAuto last month: “We are positive on the growth momentum for this year. However, the segment is not growing to its market potential and the size of the segment does not fully reflect the type of potential we have in the Indian market.”
For the future, it would be worth noting if the luxury car segment overcomes all odds to surpass its sales peaks in the domestic market.