The luxury carmakers are feeling the heat of the slowdown in the Indian car market as the demand for the luxury cars in India is witnessing a steep decline. Overall car sales dipped 16 percent in July, 2010, but the most drastic fall in demand over the past 30 months has been of the luxury cars, which were initially growing at 50-55 percent annually.
Luxury car sales constituted 1.5 percent of total car sales in 2010, which cumulated at Rs.18,15,000. Reeling under the effect of the slowdown, Mercedes-Benz has posted its first dip in the sales in three years. Other luxury car makers are finding themselves in similar situation, with BMW and Audi India witnessing a preference for their base models such as BMW X1 and Audi A4 over their high end models. According to a senior executive of Audi India, the luxury segment, especially the top-end price points of above Rs. 30,00,000, is not seeing any growth.
Sales of Mercedes-Benz reflected a 17 percent drop in July 2011, while sales of BMW and Audi slowed down to 57 percent and 69 percent respectively. According to the Society of Indian Automobile Manufactures (SIAM), Indian luxury car market grew at over 50 percent for the first four months of the ongoing fiscal year, but lukewarm response to cars like Audi A8, Mercedes S Class and BMW 6 series, with a price tag of Rs. 1crore and higher, has pulled down the demand for the luxury cars.
According to a report in the Economic Times, Mr. Debashis Mitra, Mercedes Benz India Director Marketing & Sales, stated that the 50-55 per cent growth in the luxury segment cannot be sustained in the light of changing economic indices. An overall growth of 25-30 percent in sales will be viewed as an achievement this fiscal year 2011-2012 as the retail demand has come down.