Luxury car sales in India may hit new record ahead of festive season
Luxury carmakers in India expects 2022 to break all previous sales records in the segment. Carmakers like Mercedes-Benz, Toyota's Lexus or Volkswagen Group's Audi thinks that strong demands ahead of the festive season will provide enough wind to push luxury car sales in India to go past the previous best this year. The optimism around high sales of luxury cars stems from a significant rise in sales in recent times. This comes despite the challenges like global chip crisis and supply chain issues.
2019 has been the best year so far for luxury carmakers in India. OEMs like Mercedes-Benz or the Volkswagen's Group among others had sold 40,000 units three years ago. Naveen Soni, President at Lexus India, was quoted by news agency PTI, saying, "The industry has become more resilient and with the third wave of Covid not being so severe, there has been a steady revival."
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According to Soni, luxury car segment in India has seen strong demand, especially due to change in consumer behaviour during and post Covid-19 days. He said that the segment is heading towards a V-shaped recovery path after luxury carmakers have started to manufacture their cars locally in India, as well as growing affluence and buying strength among consumers.
For Lexus India, 2022 has so far been good in terms of sales. Soni said, the entire luxury car segment has seen encouraging sales figures in 2022. "We are hoping that the demand for luxury cars will exceed the pre-pandemic level of 2019, which was the highest ever while the demand for Lexus in India has crossed our highest ever demand this July since the launch of operations in 2017," Soni said. He expects demands for Lexus cars to only go up from here. "We are looking at demand for Lexus cars to be three times of the best demand we have seen since the brand launch in 2017," he added.
Mercedes-Benz in India had shared its plans to launch several models in 2022, which also include a new electric car which will be produced locally at its Chakan facility near Pune, Maharashtra. Mercedes will introduce the new EQS luxury electric sedan in India later this month. Martin Schwenk, MD and CEO at Mercedes-Benz India, said the second quarter will see more demands due to the festive season despite all the challenges faced by carmakers. "The challenges, however, continue to be on the supply side, as we expect the semiconductor shortage to sustain during the festive period," he said.
The EQS luxury sedan, all set to make its India debut on August 24, will come in both AMG and series versions.
Volkswagen Group's Audi India echoed Mercedes-Benz and Lexus India when it said the carmaker expects strong sales demand in the second half of the year. Balbir Singh Dhillon, India Head at Audi, said, "We are working relentlessly with our HQ to get additional allocations for India, to fulfil this growing demand. It is also important to mention that the prevailing global challenges are not only impacting adequate supply of new cars, but also instilling a pressure on the prices."
Audi recently launched the A8 L in India. It will also launch the new Q3 SUV soon. Both cars, along with Audi's existing lineup of models, which includes EVs too, are expected to see good sales numbers.
Currently, luxury cars contribute less than 2 per cent of all cars sold in India every year. Despite attracting the top GST slab of 28 per cent with an additional cess of 20 per cent on sedans and 22 per cent on SUVs, luxury cars in India has seen significant growth in the past few years.