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Luxury car makers eye small towns as sales stagnate

india Updated: Jul 04, 2013 16:47 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Car enthusiasts in Kerala’s Kottayam got a new hangout destination the other day — a makeshift BMW showroom.

Looking to tap the affluent in the sleepy tourist town near the southernmost tip of India, the German luxury car maker had erected the mini mobile showroom that displayed four of its own cars along with its superbikes and the Mini.

“Today, we have millions of fans in India and many of them come from emerging cities,” said Philipp Von Sahr, president, BMW India. “With this unique travelling showroomm, we wish to bring as many customers to the BMW-fold.”

Its mobile showroom concept started in August last year in Karnal, Haryana. Till date, it has covered 11 states traversing cities like Agra, Dehradun, Jamshedpur, Nashik, Madurai, Mysore, Vizag, Vijaywada, Kottayam, Dehradun and Patna.

The company has 35 outlets in India at present. By the end of this year, there will be 15 more, mostly in smaller towns.

In a scenario where growth in the metros and bigger towns is saturating, the attention among luxury carmakers has well and truly turned to the hinterland. After a four year bull run, BMW saw its sales stagnate in 2012.

Its arch rival Mercedes that saw a 4% decline in sales last year is also as eager in smaller cities. It has 57 showrooms in 32 cities across the country. This year, it will add 10 more to the tally.

“We continue to expand both in metros and smaller towns. At present, New Delhi and Mumbai account for 45% of total sales and rest from the remaining locations,” said Eberhard Kern, managing director, Mercedes Benz India.

In the past, foraying into small towns was seen as being ambitious. Now, it is a compulsion.

Audi’s small-town sales accounts for 26% of its total, up from 22% last year and 16% the year before.

“We have seen a huge potential in tier II and III cities where customers are exhibiting an increased appetite for luxury cars,” said Michael Perschke, head, Audi India.

“Last year, we opened showrooms in smaller markets like Raipur, Goa, Coimbatore, Nagpur and Bhopal. This year, we have already added Lucknow and Bhubaneswar. In the coming months, we will open 8 more dealerships including cities like Noida and Vadodara.”