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ShareBangalore: There was a time when a Premier Padmini defined the status of an average Indian family. Cut to the post-millennium scenario: The roads are teeming with the likes of Honda, Hyundai, Toyota, not to mention Tata and Maruti from the home-stable and a smattering of BMWs and Mercedes. But last week, the benchmark for luxury just got bigger when Tata Motors announced the launch of Jaguar and Land Rover brands in India.
The lure of a smooth ride is universal. Once the markets opened up, the zeroes on the pay cheques increased. A car seemed like the next sensible buy for the otherwise mostly bike-dependent Indian as a sign of upgrading to more affordable luxuries. But is India ready for high-end luxury cars like Jaguar and Land Rover, priced between Rs63 and Rs92 lakh?
Big guns like BMW and Mercedes note high sales for the last year and are confident of keeping the numbers up. "The luxury car scene has been very challenging. I noted the sales for June easing out and the trend will continue. In fact, June has been our second best month with 289 cars being sold," says Peter Kronschnabl, president, BMW India.
Dr Wilfried Aulbur, MD and CEO, Mercedes-Benz India notes the fast pace at which the luxury car market is expanding in India: "We are very optimistic about India's growth. The Indian automotive market has developed and changed rapidly in the recent past." He adds that the passenger car market, in particular, has witnessed a double digit growth across the last five years. Mercedes-Benz India sold 3,625 passenger cars in 2008 - the highest sales ever in any year since they launched in the country.
While a buyer who has set his sights on a Beamer or Merc has no reason to be deterred, both companies offer incentives. "Customers always look for deals, where it is possible to get a discount. For the same reason, BMW offers tailor-made packages for customers in the form of service and insurance packages that are value-adds," says Kronschnabl. Mercedes too makes various easy financing options available to customers with reduced payouts and greater flexibility. Aulbur says, "We have strived to increase our reach in number and quality, to facilitate most of the customer purchases, sales and service."
Siddharth Vinayak Patankar, editor, Auto/NDTV Group, and host of the Car and Bike Show says that there is space in the Indian market for high-end luxury cars like Jaguar and Land Rover, especially in terms of bank potential: "An individual who has decided to buy it will do so irrespective of problems like infrastructure or parking. This growth is part of a five year process."
He admits that while minor obstacles may present themselves, "the companies are not entering with their eyes closed and would have taken the necessary steps to beef up the models accordingly. Taking this into consideration, certain models may not be introduced as will be with other brands. But these cars are bought mainly for lifestyle/recreational purposes, mostly not for everyday purposes or where the roads are bad. It will be limited to driving within the city."
The entry of the two vehicles, according to him, marks them as late entrants to the luxury car segment race. "I spoke to their company officials before Tata happened and they had both expressed their interest. These things cannot, however, be rushed. It is not easy to come in overnight. Things like arranging local infrastructure are as important.
Even in case of direct import, a fair amount of cost is involved. But the intention was always there. Luxury car companies have also started assembling units here. The race was sparked off a long time ago." Asked to pick the best luxury segment vehicle in India, he chooses the Mercedes S class and the BMW 7 series: "They took decent numbers and set the benchmark for the others. The other players too small."
Luxury cars are, no doubt, targeted at those who form the elite or upper strata of society. But does the aspiring middle class stand a chance? Kronschnabl does not think so: "The price of a luxury car begins at Rs25 lakh. For a middle class family, it is still too far away." For the upper middle class, it is about making a statement. Aulbur agrees, "The upper middle-class in India is finding the luxury market to be a suitable option for their emerging lifestyles. With personal incomes rising and the feel good factor becoming pervasive, the upper class Indian has evolved from a conscious buyer to a buyer of choice. A typical customer would be a young entrepreneur / professional who leads a global lifestyle and aspires for the Mercedes-brand that reflects his achievement in life."
Prashant Jodidar, a businessman in the city, owns a Mercedes and two BMWs from the 5 series. But he feels in the eyes of the public, a Mercedes and a BMW are not regarded as luxury brands for the simple reason that they are a common sight on Indian roads: "No one will recall seeing one and say, 'Hey, I saw a Mercedes on the road today'. Ten to 15 years ago, that wasn't the case."
He, however, agrees that luxury cars are not conducive to the infrastructure of a city like Bangalore: "The traffic and congestion are reasons that it can't be guaranteed that the car can be brought home free of scratches and dents. You also cannot rev up the engine in traffic so it deprives you of any fun. The luxury of being in such a car is lost because of the roads. Maintenance is also a problem."
