The sudden change in the culture of wealthy Indians spending lavishly in the name of luxury is the key to the Indian auto industry seeing a mounting demand for luxury cars. India is the fourth largest market in Asia offering an excellent opportunity to the auto industry. With a rapidly growing number of affluent consumers who appreciate sporty, progressive, and sophisticated vehicles, the luxury car segment in India tripled in the last five years.
Indian car industry witnessed a whopping growth of 25% last year. More than 5,000 luxury cars were sold in 2006 when compared to 3,000 in 2005 and just 1,000 in 2004. The 2007 figures are expected to outshine these presented figures by a mile or more. The standard of living has raised an average rich Indian is no longer satisfied with the normal cars; they like to pamper and spoil themselves with luxury and style and like to have the need to enjoy a superior lifestyle. Perhaps these expectations are molding the new class of affluent Indians to possess top brand vehicles, regardless of their prices.
The World Wealth Report 2005-06, published by Merrill Lynch and Capgemini, says India recorded the world's second fastest growth at 19.3 percent in the number of high net-worth individuals in 2005. The Maruti 800, launched in the 1980s, was a market leader having a 42 percent market share. But the increased demand of bigger and better cars has resulted in the market for large cars see an amazing growth of 27 percent in recent years.
Foreseeing the Indian market potential, major luxury carmakers are setting up their offices in India to cater to the rich peoples' fancy for trendy and luxurious cars.
Mercedes and BMW offer a starting price of Rs. 25-30 Lakh, whereas the Maybach lures the consumers to pay as much as Rs. 5 crore to drive in the lap of luxury. Now BMW is also planning to come out with small cars in India, which is definitely going to click the India. Other motor giants like Volkswagen, Volvo, Lamborghini, Rolls Royce Phantom, Bentley, and Porsche have already joined the luxury car revolution in India.
Although the craze for luxury cars is visible all across India, Punjab tops the list and remains one of the best sellers for luxury cars. According to reports, BMW sold 90 cars within six months of its launch, while Tai-Pan Traders Ltd (the dealer for Mercedes-Benz) sold more than 550 Mercedes in Punjab and is poised to sell another 210 units by the end of this financial year. Daimler aims to sell 200 units in this financial year in the state alone. High demand for luxury cars in this state is attributed to rising land prices; it is estimated that most of the owners of these luxury cars are those that have benefited from the real estate boom.
BMW is all set to cater to the demands of the rich by rolling out its executive sedan, the 5-Series model. It also launched two sports utility vehicles (SUVs), the X3 and X5 earlier this year. The 5 Series is expected to be priced between Rs. 37 Lakh and Rs. 45 Lakh (ex-showroom Delhi).
