Rising Number of Foreign Players to Drive Luxury Car Market in India : Ken Research


According to study, “Luxury Car Market in India 2011” some of the major companies that are currently working in the luxury car market in India are General Motors Company, Volkswagen AG Ltd., Volvo Group, Daimler AG Pvt. Ltd., Jaguar Land Rover (owned by Tata Motor Ltd.), Bayerische Motoren Werke AG (BMW), Toyota, Fiat Chrysler Automobiles, Ford Motor Company, Renault Nissan Alliance, Isuzu. These key players are progressively more focusing on offering well-established products, producing strong brand names and exhibit long-term reliability. The companies in the luxury carmarket are increasingly competing against each other, which are based on factors such as features, price and product quality. Some of the other luxury car brands in India are Maserati Quattroporte, BMW 7-Series, Porsche Panamera, Land Rover Range Rover Evoque, Porsche Cayenne, Jaguar XJ L and Audi A8 L.

A car, which has some extra features for comfort or status, called luxury car. It is also known for wider and broader scope. These cars are more costly than normal car. It provides pleasant and some features such asgood quality, high speed, technologically innovative modern, ample leg room, top quality music system, brilliant suspension for smooth ride, dynamic performance, phenomenal designs, leather seats, heated seats, safety and some other advanced features, which make it attractive to customer.

On the basis of vehicle type, the luxury market is segmented into Sports Utility Vehicle (SUV), hatchback and sedan. SUV may be five or seven seater: some examples are Jeep Cherokee, Land Cruiser, Rover and Fortuner. Some hatchback luxury cars are i20 and Polo. On the basis of drive type, the market is segmented into electric vehicle and IC engine. On the basis of price, the market is segmented into INR 20 lakhs to 50 lakhs, INR 50 lakhs to 80 lakhs and above INR 80 lakhs. On the basis of average type, the market is segmented into standard premium, super niche, high performance and ultra luxury. Moreover, on the basis of ownership, the market is segmented into new car and pre-owned.

The market of luxury car is mainly driven by increasing investments in automotive sector. Growing in high income households, growing economy, increasing disposable income, growing internet penetration in non-metros, exposure to international lifestyles, increase in the number of millionaires, availability of loan facility, favourable demographics, preferred choice of the young & affluent, low interest rate of loans and government regulations are increasing significantly which led to the growth of the market.

Apart from the advantages some of the challenges associated with the luxury car market include polluting environment, increase in number of cases of labour unrest, environmental issues, lack of development of proper infrastructure and affordability. Moreover luxury car market featuring some new trends are increasing in the number of distributors across country, global companies are eyeing India as manufacturing base, entering pre-owned or used car market and players diversifying offerings etc.

During 2010-2011, percentage growth sales of BMW 5 series, Mercedes E Class, Toyota Camry and Porsche Cayman were 99.90 %, 69.60 %, 52.50 % and 42.90 % respectively. In 2011, the total growth rate of luxury car market was 52.87 %, in India. This market is increasing in spite of low penetration levels. Apart from these, other factors which influence would influence luxury car market such as rising number of foreign players anticipated to drive the major growth over the coming years.

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Ankur Gupta, Head Marketing & Communications