Luxury car sales are expected to cross the 50,000-unit mark in 2024.
In 2024, the Indian luxury car market is set to cross the 50,000-unit sales mark for the first time, with key players gunning for a strong double-digit growth. In the calendar year 2023, at over 20 percent, the luxury car market grew at more than double the pace of the mainstream car market, with volumes estimated to have hit a new peak of around 47,000 units.
- Mercedes India sold over 17,400 units in 2023
- BMW India also recored its highest-ever sales
- Cars priced above Rs 1.5 crore saw massive sales growth
Mercedes-Benz India, the country’s oldest and largest luxury carmaker, recorded its highest-ever annual sales in 2023, selling over 17,400 units and registering a growth of 10 percent. Santosh Iyer, MD of Mercedes-Benz India, says the festive season of 2023 was strong and that momentum continued well into December, when the company witnessed healthy results. “So we are continuing to aim for a double-digit growth even for 2024,” he added.
Meanwhile, BMW India saw an 18 percent jump in its sales to 14,172 cars. Each of the three BMW Group brands – BMW, Mini and BMW Motorrad – recorded their highest-ever sales in the Group’s history in India. Audi India’s sales grew almost 90 percent on a low base to about 9,000 units, inching towards its previous peak.
Growing number of millionaires
The booming market reflects an increasing appetite of Indian consumers for luxury and exclusivity. The rise in the number of high net worth individuals in the country and robust spending boded well for the segment. Reports say there are about 3.5 lakh millionaires in India and the number is growing at a rapid pace.
According to BMW Group India president Vikram Pawah, as the Indian economy grows, there is a rising number of top corporate professionals who are offering heft to the segment. “We added over 50 new corporate clients, ranging from real estate, consulting, IT and healthcare, among other sectors, in CY23,” he added. For the BMW Group, its 3 Series Gran Limousine, 2 Series Gran Coupe, 6 Series, iX and X1 were the top-selling models through the corporate channel, which today accounts for 25 percent of its total sales.
Additionally, much like the average age of the Indian population, the buyers of luxury cars in India are also getting younger. For segment leader Mercedes-Benz, the buyers’ age for its top-of-the-line vehicles – the S-Class and GLS – which are priced above Rs 1.5 crore, have come down to 38 years from 45 years about half a decade ago.
In the top-end vehicle segment priced above Rs 1 crore-1.5 crore, BMW India registered a growth of 88 percent, whereas Audi India’s sales grew 40 percent. This segment includes models like the S-Class, GLS, Maybachs and AMGs from Mercedes-Benz’s stable, while BMW India sells the 7 Series, i7, X7 and XM, and Audi India sells the A8, Q8, RS5 and e-tron.
Unlike the mainstream market, with the EV segment, the luxury carmakers in India have a much higher penetration due to over a dozen models for prospective buyers to choose from, higher range and an expanding number of fast charging stations. The BMW Group is the segment leader with sales of over 1,000 EVs in 2023.
Expansion of portfolio and network
The new model launches have always excited the market and luxury carmakers lead from the front. Over 24-30 new models will be launched during 2024. Along with new models, luxury carmakers are adding new markets, and given the rising volumes, even the factories may see expansion.
Mercedes-Benz is on the verge of hitting full capacity of 20,000 units within a year or two and it may look at expansion. “We are doing the Rs 200 crore additional investment, taking the total investment up to Rs 3,000 crore now in our 30th year of operation,” said Iyer.
The cumulative investment from Mercedes was about Rs 2,000 crore four to five years back, and it has gone up to Rs 3,000 crore in a short span of time. This year, Mercedes plans to add 20 new workshops in 10 new cities, including Jammu, Kanpur, Udaipur, Amritsar, Patna, Valsad, Agra, Kannur and Kottayam. The carmaker aims to have a service facility for every customer, with a drive time of less than 2 hours.
BMW Group India, too, apart from launching new models, is adding more touch points. The BMW and Mini touch points will move from the present 63 outlets in 35 cities to 80 outlets in 43 cities, by end-CY26, informed Pawah. Audi India, which restructured its product line-up and powertrains ahead of 2020, is back to a 15-model portfolio with the reintroduction of the Q3 SUV. It has helped the brand address a wider market and the company is inching back to its previous peak.
Exporting premium vehicles from India
With the Indian luxury car market likely to touch 1 lakh units annually later in the decade, it is approaching levels that are triggering many companies to explore the possibility of exporting premium vehicles from India. Interestingly, Mercedes-Benz in 2023 exported a batch of SUVs back to Europe to cater to the global needs – underlining the quality of cars produced in India. And this is the second instance of the German carmaker doing so, giving enough cues that if the Indian market scales up, the plant here can take the global responsibility.
Since the automotive business works on very tight margins, the logistics and other costs play a very important role in firming up the production base for exports, say experts. The likes of Tesla, VinFast and BYD are already eyeing local manufacturing facilities here to export, and so the premium carmakers too may eventually opt to capitalise on the low cost base.
Also see:
India overtakes Japan once again in global car sales
Lamborghini India sales cross 100 units for the first time in 2023
