Luxury car market feels the sting of a challenging 2018
Even though their global performance has been on the peppier side in 2018, luxury carmakers in India found last year to be a challenging one. Compared to developed markets where luxury vehicles typically account for around 5-6 percent of the overall market, their share in India is a little over one percent.
Luxury vehicle manufacturers in India ended the calendar year 2018 on a tepid note as a number of factors such as high import costs, depreciation of the rupee and a liquidity crunch impacted demand considerably. Overall volumes are estimated to have totaled 40,688 units, up barely three percent from the calendar year 2017’s 38,989 units.
Although in 2018 kicked off on an upbeat note with healthy growth in the first half, volumes came under pressure in the second half as the macroeconomic forces came into play. And, after a Supreme Court decision that made it mandatory for all car owners to take three-year motor insurance cover from September 1, car prices turned dearer.
The pecking order remains the same as in 2017 with Mercedes-Benz India leading the charge, followed by its German rivals BMW and Audi. They are followed by British carmaker Jaguar Land Rover, Swedish carmaker Volvo and performance carmaker Porsche.
Market observers are cautiously optimistic about sales prospects in 2019 as the luxury vehicle segment continues to face a challenging environment. Case in point: growth rates for Mercedes, BMW, Audi, JLR India, and Porsche dipped when compared to 2017, a year in which they grew at 16 percent, 25 percent, 2 percent, 49 percent, and 10 percent, respectively. Automakers will hope for the best, fingers firmly crossed.