India's growing number of millionaires is driving sales of luxury and super luxury cars. While India's growth story for small and medium passenger cars is slacking off, luxury and super luxury cars are showing steady growth.
Sales of passenger cars rose 9.1 per cent in May to 96,922 units from 88,863 in the same month a year ago. In contrast, premium and super-luxury brands, including Nissan, Skoda, Mercedes Benz and Rolls Royce have been enjoying steady growth.
Skoda's flagship Sedan, the ₹19-22 lakh Superb, has grown from 48 units in April to 53 units in May 2007, according to a company release. However, Skoda's total car sales, including economy and premium segments, fell from 1,000 to 810, in the same period.
Daimler-Chrysler India, manufacturers of Mercedes Benz cars, recently shifted from importing completely built units (CBU) to manufacturing cars here from completely knocked down (CKD) units. According to sources in the industry, Mercedes Benz sales have gone up by over 100 per cent in the last three months since it started rolling out CKD units.
The company launched two new models this year, including the ₹1.7 crore new CL Class and the new diesel S Class. There was huge demand for these cars in central and eastern parts of Maharashtra, sources said. Daimler-Chrysler does not publish figures as a matter of policy and its executives were not available for comment on sales numbers. Nissan, another carmaker that sells only premium cars in India, has seen orders for the new Teana go up significantly.
"Since its launch in April, the Teana has crossed three figures in orders," said a source with knowledge of the company's operations. However, official confirmation of the orders was not available.
'Rising interest rates have a lower impact on the sales of luxury cars vis-a-vis economy cars. The reason for this is that buyers of luxury cars take finance for considerations such as tax planning, not because they need the money, while buyers of economy cars take finance because they actually need the money,' said Ashwin Sanghi, Director, Sanghi Motorcar Co, dealers for Mercedes Benz.
Only 0.01 per cent of India's population falls in the super-rich bracket, compared with 1.29 per cent in Japan and 1.48 per cent in Singapore.