Indian luxury car market which is registering growth of 50-55% annually is feeling the heat of low demand now. After overall passenger car sales dropped by 16% in July 2011, demand for luxury cars has come down too. Mercedes-Benz which is the face of luxury car segment in the country has recorded its first decline in sales in three years.
Sales for Mercedes-Benz India dropped 17% in July to 478 units. The other two big competitors, BMW and Audi India, are witnessing a decline in sales of their top models as customers downgrade to entry-level luxury cars like the BMW X1 and Audi A4 sedan.
BMW India sold 840 cars in July. Its compact SUV BMW X1 which is priced at minimum Rs 22 lakh contributed most to the sales tally. Audi’s A4 sedan, in the Rs 27.18 lakh bracket, is also finding more takers than its higher end cars do.
“Growth in the luxury segment is not coming from the top-end price points of above Rs 30 lakh,” says a senior executive of Audi India, Economic Times reported.
According to the Society of Indian Automobile Manufacturers (SIAM), the luxury car market grew at over 50% for the first four months of the ongoing fiscal year. However, a tepid response to expensive flagship machines like Audi A8, Mercedes S-Class and BMW 7-Series and exotic models like the BMW 6 Series convertible, Audi R8 and Merc’s E-Cabrio and SL Roadster – all in the Rs 1 crore and above price bracket – have tamed growth.
