SPEEDING UP: The segment collectively witnessed sales of 40,340 units in 2018 as compared to 38,950 units in the previous year
The luxury car market recorded a subdued growth of 3.5% during in 2018 despite the companies lining attractive discounts and offers to pep up the demand, shows the latest sales data by the original equipment manufacturers (OEM). But with a slew of launches, the carmakers are trying to change the script this year.
The segment collectively witnessed sales of 40,340 units in 2018 as compared to 38,950 units in the previous year, according to a DNA Money compilation of data provided by the OEMs.
This is in contrast to 2017 when the luxury car market grew at around 17%, its fastest pace in five years.
The company executives reveal that the sales were as per the expectations up until the mid of 2018, but went downhill later as increased government taxes, tighter liquidity, higher rates, increased insurance cost, lower consumer sentiments kept the buyers on guard.
Mercedes-Benz continued its lead in the Indian luxury car segment for the fourth year in a row, selling 15,538 units during last year, a growth of 1.4%. But rival BMW clocked a growth of 13% over 2017 with sales of 11,105 cars (BMW + MINI).
Tata Motors-owned Jaguar Land Rover (JLR) India sold 4,596 units, posting a 16.23% growth over the 3,954 units sold in 2017.
Volvo Cars India announced a robust 30% growth, with 2,638 retail sales in 2018. Charles Frump, MD, Volvo Cars India, said in a statement, “I am confident that 2019 will be a great year for Volvo Car India when we will turn our focus on company and dealer profitability.”
Audi India, on the other hand, recorded a de-growth of 18% with 6,463 deliveries. The company blamed it on the closure of its single-largest dealer, which impacted the sales in the National Capital Region, the largest market for luxury cars in India. At the same, time the company also battled with the supply constraints of selected models owing to European market shift to WLTP cycles and resultant phase in-phase out of the models, which also impacted the deliveries, the company executives said.
WLTP stands for Worldwide Harmonised Light Vehicle Test Procedure which provides for more realistic testing conditions, providing an accurate basis for calculating fuel consumption and carbon dioxide emissions.
“The year 2018 has been a challenging one for the automotive industry in India, especially in the second half of the year," said Rahil Ansari, head, Audi India.
On the outlook for 2019, Martin Schwenk, managing director and CEO, Mercedes-Benz India, said, “The year will be marked with some of the most significant product introductions which will redefine luxury motoring and chart new avenues for future mobility”.
Analysts claim that though the luxury car industry witnessed a subdued growth during the last calendar year, the segment is unlikely to see any slowdown as car makers are planning product offensive in the current year to capture a larger market pie.
According to the company executives, while BMW is said to be preparing to fire on all cylinders with around a dozen new launches and upgrades, market leader Mercedes-Benz is aiming to compete with at least ten launches.
On the other hand, Volvo Cars aims to become the first carmaker to locally assemble a plug-in hybrid (PHEV) car in the country, which will go into production in late 2019. The company has already announced setting a line-up of four launches of PHEVs over the next three years.
The British brand JLR has some big plans, too. It will be launching at least 16 new cars and SUVs globally between 2019-2024.
Experts say the luxury car market sales in India was in alignment with the low growth phase of overall passenger vehicle segment which saw lacklustre retail demand during the festive period and high inventories.
Sridhar V, partner, Grant Thornton India LLP, said the luxury cars are no exception to the conditions which affected the passenger vehicle segment. “Apart from low key festival sales and other macro-economic conditions, forex situation and tougher financing options specifically impacted the customer sentiments resulting in lower growth.”
GOING FULL THROTTLE
- BMW is eyeing around a dozen new launches and upgrades. Rival Mercedes-Benz is aiming for at least ten launches. JLR plans to launch at least 16 new cars and SUVs globally between 2019-2024
- Volvo, which aims to be the first to locally assemble a plug-in hybrid (PHEV) car in India, has planned four PHEV launches over the next three years
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