India may not be a large market but it's a profitable market and it's growing well. And there is certainly the understanding that the luxury car market will continue to grow here. Whether it happens this year, or next year, or in five years, the fact is that it will grow.
India is predicted to become the third-largest global economy by 2030. Some studies are counting India among the Big Three -- China, US and India.
If we take into account a fairly respectable GDP growth rate and a strong outlook for the future, an increase in the number of high net worth individuals, youth-led affluent market and the government's push to curb monetary leaks, India is all set to soar.
Add to this potent mix, the growing understanding of luxury and a desire to reward achievements with luxury buys and the market has immense potential. In fact, the young customer base is a very big strength, and with India's large population this segment is slated to grow. Young professionals and executives, first generation entrepreneurs who look forward to treating themselves with a nice luxury car are increasingly associating with us.
This bodes well for the luxury automobile market. The market has grown eight-fold in the last seven years. Units increased from a meagre 4,000 in 2007 to a mindblowing 35,000 in 2015. It is projected that the market will at least double by 2020. Typically, the premium segment displays better dynamics than volume segment in many BRIC markets including India.
Currently, luxury enthusiasts in smaller cities are the ones who are converting into customers really quickly as there is an increasing aspiration for luxury, are well informed and aware of the brands and their value, as much as their counterparts living in a metro. In the next 10-15 years, penetration of luxury car industry in Tier-3 cities will also increase.
The luxury automobile industry is constantly in an innovation mode and the growth of this segment is largely driven by the new and innovative technology the cars have to offer. Piloted driving, electrification and digitalisation are some of the trends that I see at the forefront of automotive technology future. This and other technologies, which are currently under development, give me confidence that the future will truly belong to increasingly advanced technologies that will make driving safer and simpler. The technological advancement will couple with new frontiers on design to offer cars which offer the best of style, aesthetics and functionality.
The advancement in technology will not be limited to only cars, the cities and infrastructure of future will also be digitised. Audi has been working on the future of mobility. Since 2010 the Audi Urban Future Initiative has been a platform for an international and interdisciplinary dialogue about the future of mobility in cities. Even in India, with the concept of smart cities being propagated, the day is not far away when cars would begin interacting with the systems. Down the road, Indian luxury car market will also become more mature and adopt green fuel cars.
In the total volume, India may not be a large market but it's a profitable market and it's growing well. And there is certainly the understanding that the luxury car market will continue to grow here. Whether it happens this year, or next year, or in five years, the fact is that it will grow.
The writer is head of Audi India
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