Even as the domestic car industry is battling a slowdown in sales, there is no let-up in the demand for luxury cars with the big trio — BMW, Mercedes and Audi revising their targets for the current year — upwards.
All three have posted big growth in the first six months this year, with Audi, the smallest of the three in India, already selling as many cars as it sold in 2010 and BMW, the biggest of the lot, now aiming at sales of 10,000 units for 2011, a target that it had initially set for 2012.
“The first half of this year has been the fastest six months that BMW has ever seen in India,” said Andreas Schaaf, president, BMW India. “This is a little ironical because everywhere we keep reading and hearing about a slowdown but when we look at our sales or enquiries at our dealerships, it has never been better. If the first half of the year is so good, the second half would only be better. Sales of 10,000 units this year is within our sight now.”
BMW’s surge in sales is largely led by the 5 series and its latest launch X1, with which it lowered the entry-price point for BMW in the country. After a slow start, the SUV raked up sales of over 400 in June, the most that a luxury car has ever sold in India and is now the second-largest selling SUV in its segment.
It is ahead of cheaper models such as Ford Endeavour, Chevrolet Captiva and Mitsubishi Pajero. Overall BMW sold 4,524 cars this year so far, a growth of 107% over 2010.
BMW's optimism is shared by its main rivals Mercedes Benz and Audi as well. Mercedes' sales in the first six months grew by over 58% to 3,798 units while Audi saw its sales double during the period to over 2,802 units. But why are sales growing when the rest of the sector is sluggish?
“Generally, the luxury car segment is sort of insulated from the rest of the industry as any slowdown pangs take sometime to affect our profile of customers,” said Peter T Honegg, MD & CEO, Mercedes Benz India. “Inflation and higher interest rates does affect our business and we are watching the developments closely but so far there is no major problem.”
In the past 5 years, luxury car sales have grown at an average 64% every year, almost four times the industry average of 17.6% per annum.