It’s not just new money in China and India that make luxury carmakers such as Ferrari, Bentley and Bugatti look east. They are also affected by environmental regulations in Europe that get tougher every year. There is a move within the EU to impose a penalty of up to €40,000 on these high-performance cars.
The move initiated in 2007 is likely to come into effect soon. Thus, there is a heightened interest among these brands to expand in emerging non-Western economic powerhouses such as China, India and Brazil.
In 2011, five new luxury brands selling cars priced above Rs 1 crore, debuted in India including Maybach, Koenigsegg Agera, Maserati, Aston Martin and Ferrari. Currently, the market for Rs 1.5 crore plus cars is estimated around 250-300 units a year.
“If the import duty comes down substantially, India will probably be among the top three luxury car markets,” said Trevor Gay, special sales manager for Middle East and Asia, Bentley.
Bentley, which has been present in the country since 2003, is scaling up its operations. Besides the existing two dealerships in Mumbai and Delhi, Bentley plans to open two more outlets this year, in Ahmedabad and Hyderabad. Bentley sold around 50 units in India last year, as per sources.
“All luxury players are on a consolidation drive,” said Lalit Choudary, director, Performance Cars, which sells Aston Martin cars in India. “From the current 250, the volume will double in the next three years.” Last year, Aston Martin clocked 30 units.
The rise of the number of people with investible income of $1 million in India — 21% in 2011 to 1,53,000 — is good news for makers of expensive cars. “There are wealthy people across the country and they now have a wide range of choice,” said Pratik Desai, vice-president, Exclusive Motors, which sells Bugatti, Bentley and Lamborghini brands in India.