India: Unveiling Untapped Potential for High-End Car Industries

Right now, India's car market is the fourth biggest globally. Nevertheless, the luxury segment only makes up 2% of the total because of the one-of-a-kind characteristics of the Indian market and the hefty import duties, which can reach 100%. Consequently, this makes it harder for luxury foreign automakers to expand. This number has even fallen below 1% as of 2021.

According to Zigwheels.com, sales of imported vehicles fell to 19,781 units in 2021, a 51% decrease from 2020, and the pandemic only made matters worse.

But with electrification, these automakers may be able to forge a stronger foothold in the enormous Indian market. But first, let's take a step back and examine the current situation to better understand how these car companies intend to establish a presence in this region of Asia.

Sales of Pre-Owned Luxury Vehicles Soar
Exciting Times Await!
Growth of Mini-Metro Networks and Portfolios

Sales of Pre-Owned Luxury Vehicles Soar

Expert market research has just reported that India used luxury car market size is poised for robust growth, with a projected Compound Annual Growth Rate (CAGR) of 16.30% from 2024 to 2032. Rising demand for luxury vehicles, especially for subscription services and rentals, and a larger pool of youthful buyers are the main factors fueling this expansion.

The market's expansion can be attributed, in large part, to the enthusiasm of the younger generation for high-end automobiles. Furthermore, more and more people are choosing subscription services and renting cars, which opens the market to more people and makes luxury vehicles more accessible. There will be plenty of chances and thrills for industry participants and enthusiasts as these elements combine to take the used luxury car market in India to new heights in the coming years.

When purchased brand new, high-end vehicles from prestigious manufacturers like Mercedes-Benz, BMW, Audi, and Jaguar can cost a pretty penny. But as time goes on and these cars lose value, more people in the used automobile market can afford to buy them. People in India, particularly those living in cities, now have more money to spend how they like. A desire to buy luxury cars, even secondhand ones, has become aspirational as a result of this. People are better informed about the benefits of purchasing used luxury cars because of the proliferation of digital platforms and simple access to information. They are aware of the possibility of substantial reductions that do not sacrifice performance or quality. Certified pre-owned programs are now available in India from several luxury car manufacturers. By enforcing high-quality standards and providing extended warranties, these programs give purchasers peace of mind when purchasing used cars.

Exciting Times Await!

According to Balbir Singh Dhillon, CEO of Audi India, rising demand for luxury cars might cause sales in the country to surpass 50,000 units in 2024, a first for the country. Last year, the domestic luxury car market as a whole saw record sales of almost 48,500 units, an increase of 28 percent from the previous year.

The luxury car market in India has been relatively stable over the last decade, with yearly sales of less than 2% of all passenger vehicles. Retail sales for Audi vehicles in India increased by 89% in 2023, reaching 7,931 units, up from 4,187 units the previous year.

Similarly, with sales of 17,408 units, up 10% from 15,822 units in 2022, Mercedes-Benz India had its biggest year ever in India.

In 2017, a combined total of 14,172 BMW and MINI vehicles were sold in India by BMW.

Growth of Mini-Metro Networks and Portfolios

Launches of new models have long piqued consumer interest, with luxury automakers typically setting the tone. The year 2024 will see the release of more than 24–30 new models. Luxury automakers are expanding into new markets with new models, and with production volumes on the rise, even the plants may have to expand.

Mercedes-Benz may consider expanding its operations if it reaches its full capacity of 20,000 vehicles, which is expected to happen within the next year or two. Mercedes' total investment has increased rapidly from 2,000 crore rupees four or five years ago to 3,000 crore rupees now. In ten additional locations this year—Jammu, Kanpur, Udaipur, Amritsar, Patna, Valsad, Agra, Kannur, and Kottayam—Mercedes intends to open twenty new workshops. The manufacturer's goal is to ensure that all customers can access a service center within a two-hour trip.

In addition to releasing new models, BMW Group India is expanding the number of touchpoints with customers. Vikram Pawah, President & CEO at BMW Group India informed that by the end of FY26, the number of BMW and Mini contact points will increase from 63 in 35 locations to 80 in 43 cities. With the return of the Q3 SUV, Audi India has returned to a 15-model portfolio after restructuring its product line-up and powertrains in preparation for 2020. The corporation is slowly making its way back to its prior height, and the brand is reaching a bigger audience as a result.

There is every reason to expect the luxury car market in India to continue growing. This area is poised to have an even greater increase in sales volumes as young entrepreneurs venture into new ways to expand their firms. Maintaining a seamless supply chain, resolving semiconductor shortages, navigating geopolitical problems, etc. are just a few of the obstacles that these high-end firms must overcome. Once they are resolved promptly, this sector will no longer have any obstacles in expanding its reach in India.

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