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Luxury car sales expand at slowest pace in
two yearsLuxury car sales expand at slowest pace in two yearsShally Seth Mohile & Yogendra Kalavalapalli
First Published: Fri, Jun 15 2012. 01 15 AM IST
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Speed limits on Mahindras growth rate
Audi Indias car sales rise 29%
Changed strategy: Peter Honegg, managing director and chief executive officer, Mercedes-Benz India, said the firm
plans to introduce its entry level A- and B- class cars in the Indian market to regain
Updated:Mon, Jun 18 2012. 03 15 PM IST
Mumbai/Hyderabad: High taxation, skyrocketing petrol prices and costlier finance are not hurting
mass market car buyers alone. Luxury car buyers, too, are feeling the heat with sales of models
priced above Rs20 lakh having expanded at their slowest pace in two years in the first five months of
this calendar year.
Luxury cars, which account for less than 2% of Indias 2.16 million car market, advanced merely
10% in the five months ended May against 80% during the same period in 2010, said Debashis
Mitra, head, sales and marketing, at Mercedes-Benz India Pvt. Ltd.
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Mercedes Indias sales in the first five months of the current year, according to Mitra, dropped 22%
to 2,500 units over the last year. He added that even as enquiries at the showrooms continue to be
high, conversion rates have fallen since buyers are postponing purchase decisions due to an
increase in the import duty from 110% to 140%, the rise in finance cost from 8% to 11%, and hike in
petrol prices.
Changed strategy: Peter Honegg, managing director and
chief executive officer, Mercedes-Benz India, said the firm
plans to introduce its entry level A- and B- class cars in the
Indian market to regain market share. Photo: Noah Seelam
/AFP
Its a very sentiment-driven market, said Mitra.
The rate of expansion is even slower than what was
seen in 2009 when sales increased by 16%, added
Mitra while talking to reporters on the sidelines of
the launch of the C-Class AMG performance edition
in Mumbai.
The story is similar for BMW India Pvt. Ltd, the market leader in luxury cars, whose sales expanded
by only 10% to 3,707 units till May against a 90% growth in the same period last year, Andreas
Schaaf, president, BMW India, told PTIon 6 June.
We are working in a fragile economic environment now. This is the most difficult year that we are
seeing in the last two years, Schaff had said.
Industry body, Society of Indian Automobile Manufacturers, or Siam, does not publish comparable
data for all luxury car makers.
Abdul Majeed, auto practice leader at PriceWaterhouse Coopers, said, People tend to hold back
purchases during tough times. I dont see the situation improving for another six months.
Some analysts, however, are optimistic about the long-term growth prospects of the segment that
has been outpacing the mass car market. Deepesh Rathore, managing director at IHS Automotive,
a market research and sales forecasting firm said, We expect the market to quadruple by 2020.
India sold 25,000 luxury cars in 2011.
Audi India Pvt. Ltd, which pipped Mercedes India to become the second largest in the segment
recently, has been bucking the trend. The company sold 3,281 units in the five months to May,
expanding 37% over the same period a year ago. Still, Michael Perschke, head of Audi India strikes
a cautious note.
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The overall market scenario is challenging. Rising fuel prices, depreciating rupee, changing
registration taxes in various states as well as a reduction in retail loans have severely impacted the
automobile industry, he toldPTIon 1 June.
In a bid to regain marketshare, Mercedes plans to introduce its entry level A- and B- Class cars in
the Indian market. The A-Class, a hatchback will be launched next year while the B-Class is
expected by the end of 2012.
Meanwhile, at a press briefing in Hyderabad to unveil the AMG, Peter Honegg, managing director
and chief executive at Mercedes-Benz India, said the frequent hike in petrol prices has forced the
car maker to change strategy.
Two years back, in line with the market demand, Mercedes-Benz Indias car portfolio consisted of
60% diesel cars and 40% petrol cars. Last year, after petrol price hikes, the portfolio comprised 90%
diesel and 10% petrol cars.
Depending on the governments decision, we might have to revise it (portfolio) again, he said,
adding that if the government does take a decision to tax diesel cars, it would take Mercedes eight-
nine months to change the portfolio.
BLOGS/Business & Strategy
Ashish K MishraCounter intuitive motor head with a fancy for old cars, green tech and clean fingers+ Follow (59)
Who is the real No. 1 luxury carmaker in India?07/11/2012 |3 comments| 3152 views
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So who is the Hero No. 1 of the India luxury car market?
Audi claims that in the month of June 2012 the company sold 759vehicles. BMWs
numbers are 750. Mercedes Benz sold 622 cars. So with a lead of 9 vehicles, Audi edges
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BMW to become Indias No. 1 manufacturer of luxury cars. Not so fast, says BMW.
BMW claims that Audi has reported wholesale numbers to Society of Indian Automobile
manufacturers (SIAM) while it has reported retail sales. So it is not an apples to apples
comparison.
Wholesale means cars that are billed to dealers. Retail sales mean cars which have
actually been sold to customers. BMW claims that Audi sold only 718 vehicles (retailsales) compared to BMWs 750. Of course, exactly how BMW managed to get Audis
retail sales number is bit of a mystery but its claim is that BMW is still the No. 1. Now
add another twist to it. SIAM is the body responsible for collecting and disseminating
sales data of all car/two wheeler/commercial vehicle manufacturers in India. And SIAM
says that it never accepts anything but wholesale data from manufacturers. And
itwouldntacknowledge or comment on whether BMWs sales numbers are retail or
wholesale.
Now if you are in the business of writing about/following the automotive industry in
India, you would know that this wholesale/retail number allegation game has been on
between these three German luxury car manufacturers for quite sometime now.Mercedes Benz says that it will stand by what SIAM recognizes and thats wholesale
data. BMW says that globally it reports retail sales, so it cannot make an exception for
India. I understand that Audi shares retail sales data too. Although I am intrigued how
the wholesale data for the month of June 2012 made it to the SIAMs data sheet which
has led to this confusion.
SIAM is absolutely miffed with all this. I spoke to a SIAM executive on this matter about
a month back and this is what he had to say. This has become an absolute joke. We
have taken up the matter in the executive committee meeting and sent a letter to all
three manufacturers that they should wholesale numbers only. But till now they have
not done it, he said. He went on to add that this confusion on the numbers has led tomany people questioning the sanctity of SIAMs data. I think SIAM really needs to come
out and clear the air over whether it is going to accept retail numbers from BMW and
Audi. If not then there is bound to be confusion and endless instances of bragging rights
to the No. 1 position.
Read more:http://forbesindia.com/blog/business-strategy/who-is-the-real-
no-1-luxury-car-maker-in-india/#ixzz2Ns6o9mL8
India has a market for 25,000 luxury carsMost manufacturers view India as an emerging yet important market.
PRASID BANERJEE NEW DELHI | 8th Dec 2012
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Ex-showroom prices for the Lamborghini Gallardo and the Aston Martin One-77 (in picture) are Rs 1.55 cr and Rs 20 crrespectively.
uxury and high-end sports car manufacturers view India as an emerging market with the
capacity to buy around 25,000 cars at present. They say it is a small market, but agree that
the country is doing well in terms of sales.
Says Del Sehmar, communications manager with Jaguar Landrover (JLR), "It's doing well
but you have to remember that the luxury car market in India has a maximum of 25,000
units. When you look at China, we're selling in the region of 70,000 cars per year. The total
market in India is only 25,000 and this is shared amongst different manufacturers."
According to data provided by the Society of Indian Automobile Manufacturers (SIAM),
Mercedes Benz India Pvt Ltd sold over 3,500 vehicles in the April-October 2012 period,
while Tata-JLR and Volkswagon-Audi sold over 1,200 and 5,100 cars respectively.
"Gone are the days when a luxury brand meant the three pointed star that adorned
Mercedes-Benz models," says Umang Kumar, CEO and co-founder of gaadi.com. According
to him, in the luxury sector, BMW and Audi are the most popular, with Audi being just 122
units behind BMW in the January-October 2012 period. When it comes to sports car brands,
the trio of German manufacturers Mercedes, Audi and BMW offer a wide variety in the
country, says Kumar. While the brands do not seem willing to let out their exact sales
figures, Kumar says that Mercedes Benz has the biggest portfolio in India with their AMG,
SL, SLK and SLS versions.
Kumar's inputs are further corroborated by JLR's Sehmar, who says that the company sold a
total of about 2,300 Jaguars in the last fiscal (2011-2012), while the number was 891 in the
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year before that (2010-2011). The company's sales grew by 157% over the last year. Talking
about their goals in India Sehmar said, "Yes, it's a very important market for us and yes, it's
emerging. But in terms of the sales right now, they aren't particularly massive but we're here
for the long run and we see that the country has a lot of potential." Sehmar refused to give
any numbers to JLR's goals in the upcoming year.
Gaadi.com's Kumar says that in 2010, "The growth in the first six months of the year stood
at 80% but came down to 35-40% in 2011. For 2012, it was 9% due to various reasons like
hike in fuel prices, increased customs duty on imported cars and a steep fall in the rupee."
However, these companies seem to have a positive frame of mind. BMW aims to achieve its
target of 40 dealers by the end of 2012, says Kumar.
BMW India achieves top position in luxury carmarket during 2012 with sales of 9375 unitsBrowse:: BMW Car News BMW Car Reviews BMW Car Specs
January 09, 2013, 12:34 IST by CarTrade Editorial Team
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BMW has come up with its total sales for 2012, which made it a clean chit winner in Indian luxury auto market, following the
sales figures revealed by Audi India. The former reported sales of 9,375 units for the last calendar year, marking an increase by
372 units over 9,003 units sold by Audi India during 2012. Interestingly, BMW also registered a marginal increase by just 4 units
in 2011 and was crowned as countrys number one luxury car maker at that time.
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BMW India achieves top position in luxury car market during 2012 with sales
It must be noted that Audi India also came up with a positive growth in 2012 with an increase of 63 per cent. However, the sales
figures of Indias third largest luxury car maker, Mercedes -Benz remained too far from the figures of its two indigenous car
makers at 7,138 units. Mercedes-Benz is believed to be the first position holder since the inception of Indian luxury car market,
until it was laddered down by BMW in 2009.
Besides declaring its sales figures, BMW India revealed future plans for 2013. In order to continue its chapter of success in the
country, the auto maker is looking ahead to introduce the new models of 7 Series, 1 Series and X1 in the current calendar year.
Till the end of 2012, the Chennai manufacturing plant of BMW was witnessing the production of BMW 3 Series, 5 Series and X1
in both petrol and diesel versions, which will now also roll out two additional models, 1 Series and 7 Series.
With these future plans, BMW seems all set to retain the numero uno position in 2013 as well. As per sources, the auto maker
also has few further aggressive plans for the market, which are anticipated to frame a tough time for its indigenous auto makers.
BMW, Mercedes-Benz and Audi to bringcollapsible showrooms to townsMarch 12, 2013, 11:38 IST by CarTrade Editorial Team
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The German trios, BMW, Audi and Mercedes-Benz, have decided to reach to those customers, who cannot go to showrooms.
With its new move, these auto makers have decided to take their showrooms to buyers of small towns who have the potential to
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buy a luxury model but often feel hesitated to go to showrooms. Industry experts believe that this move is the need of hour in
such competitive market and thus, the auto makers are also trying to tap the potential buyers of the country.
Reportedly, the German trios are luring buyers by taking their collapsible showrooms in the towns of Nashik, Vapi, Madurai,
Jamshedpur and Agra, among others. According to reports, these showrooms get assembled in just 24 hours and are made up of
prefabricated material. These new kind of showrooms are packed with all comforts of a mortar and brick unit, comprising the
display area of around 4 to 5 cars. Such collapsible showrooms have air conditioning system, VIP lounge, reception area and
facilities for instant test drives to interested buyers.
With these mobile showrooms, the auto makers are anticipating to at least sell one car each day. It must be noted that BMW said
that it sold four units on the very first day of its mobile showroom, when it started the programme last year in Dehradun.
Reportedly, sales in these regions mostly occur in cash against what is generally seen in the urban areas wherein more than 70 per
cent individuals resort to financial institutions.
On this move, industry experts said that it is not new, as earlier the initiative was undertaken as a part of experiment, which is
now carried on a regular basis. A main advantage of these showrooms is that the cost of construction has been significantly
reduced, which has facilitated the auto maker in employing its investment in other fields for promotion of their models.
India's flashy new rich drive luxury carboom
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By Henry FoyMUMBAI | Tue Jan 3, 2012 2:03pm IST
(Reuters) - From farmers who swapped fields for cash to 20-something CEOs that inherited the family business, hot new money isflooding India's luxury car market as roaring sportscar enginesannounce the country's growing wealth on its roads.
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No senior Indian executive feels complete without his sleek German-made saloon, while Italiansportscars are the new calling cards for the country's rich young things at exclusive nightclubs thatscreen guests at the main gate, not at the door.
"There is a rush to luxury," says Mohan Mariwala, managing director of Auto Hangar, surrounded bygleaming Mercedes Benz sportscars in one of his four Mumbai showrooms for luxury cars.
"Farmers, tiny industrial families, the younger generation with different value systems...You can'timagine the kind of people who invest in extremely exotic cars today."
Headline growth in Asia's third-largest economy may be stuttering, but decades of growth hasspawned a new upper class with global tastes and aspirations that is driving a $1 billion luxury carmarket expanding at 40 percent annually, say industry analysts and research firms.
Five years ago, Daimler AG's Mercedes Benz was the only established luxury carmaker in India andsightings of sports cars on the dusty and poorly-maintained roads were rare.
Today, crowds gather along Mumbai's famous seafront to catch a glimpse of supercar parades,while a Facebook group for luxury car sightings explodes with excited chatter over a blurry photo ofan Aston Martin Rapide, a car that costs more than $300,600 in a country where more than 500million people live on less than $1.25 a day.
"The new Indian luxury consumer is pursuing a lifestyle where owning exclusive items and owningthem first is a clear sign of wealth and power," Andrea Baldi, Southeast Asia and Pacific salesmanager for Lamborghini, told Reuters.
Growth in overall car sales will likely be flat in the financial year that ends in March, India's autoindustry association has said, as mainstream firms struggle with faltering demand thanks to risinginterest rates and higher prices.
Luxury automakers, however, are rushing to set up shop.
Britain's Aston Martin, famously James Bond's car of choice, and Fiat's (FIA.MI) Italian brandsFerrari and Maserati all opened showrooms in India in 2011, joining established brands such asVolkswagen AG's Audi and BMW.
"India's young population is affluent and dynamic, the environment is just right," said Baldi.
Lamborghini introduced its Aventador LP 700-4 in the country in November, priced at 36.9 millionrupees. It has taken orders from India for more than 20 Aventadors and buyers must wait 18 monthsfor delivery.
JUMPING SEGMENTS
Not long ago, a Honda Accord or Toyota Camry was considered a luxury car in India, where small,cheap cars predominate and the best-selling model isMaruti Suzuki's Alto, which starts at 232,247rupees.
"There is a distinctive shift happening. People are jumping segments...from a Honda Civic into a
Mercedes Benz E-class," said Mariwala, who sells around 100 Mercedes vehicles a month from hisfour Mumbai showrooms.
Haresh Punjabi, 46, who lives in Gurgaon, a booming modern suburb of Delhi, owns a MercedesML350 sport utility vehicle, a BMW 740 Li, and a Porsche 911 Carrera. Punjabi, who exports homefurnishings to the United States, said expensive cars have become commonplace in hisneighbourhood.
"If five years ago you bought a BMW or a Mercedes, people still looked at it. Today if you buy aBMW, Audi or Mercedes it's not as big a head-turner," he said.
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Spending on luxury cars in India grew 36 percent in 2009-10 to $1 billion, according to a recentlyreleased report by AT Kearney, outstripping growth in jewellery, electronics and watches.
Demand for high-end cars goes beyond India's biggest cities.
While BMW sells 70 percent of its cars in Delhi and Mumbai, most of the 36 new showrooms it plansover the next four years will be in smaller cities.
In 2010, the city of Aurangabad, deep in the heart of the western state of Maharashtra, madeheadlines when residents ordered almost 150 Mercedes-Benz cars.
India has around 2 million households with annual incomes of more than $36,000, a number set toswell to around 8-10 million households by 2015 if the country's economic growth stays on track,according to global research firm McKinsey & Co.
"The mindset of the luxury autos customer has shifted from being a discreet buyer who wants to stayunder the radar to someone who is not shy of flaunting their wealth," said Rajat Dhawan, a partner atMcKinsey in India. "This trend will further accelerate...It is one of the biggest things you can have toflaunt that you have arrived."
POTHOLES AND TAXES
BMW won India's luxury sales race in the year to March 2011, selling 7,079 vehicles compared to6,670 for Mercedes. Both are on track to meet targeted sales of 10,000 cars this fiscal year.
Despite its fast growth, India's luxury car market lags far behind China, where Mercedes and BMWsold a combined 320,000 vehicles in the first nine months of 2011.
Taxes of up to 110 percent levied by the government on imported luxury goods mean supercarsbought in Mumbai are far more expensive than those bought in Monaco.
As demand increases, manufacturers can reduce levies to 40 percent on models assembleddomestically, a tactic already employed by BMW, Mercedes andTata Motors, which owns the Britishluxury brands Jaguar and Land Rover.
Another speedbump is slowing economic growth.
While analysts say luxury sales are likely to stay strong, dealerships say the recent monetarytightening by the central bank has eaten into demand as financing costs rise. A rupee that fell 16percent in 2011 makes imported models more costly.
Luxury carmakers and sellers also cite India's crowded, pot-hole scarred roads and the lack of arobust highway network, where owners can flex their powerful engines, as drawbacks for the sector.
Punjabi said he mainly drives his Porsche early on weekend mornings in order to avoid traffic.
In Mumbai, owners of high-performance cars use flat-bed trucks to carry their vehicles in order toavoid the bumps and scrapes that are common on the city's congested streets as they make theirway to a nearby expressway where they hold invitation-only parades.
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