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India Luxury Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

  • ID: 4763945
  • Report
  • June 2022
  • Region: India
  • 60 Pages
  • Mordor Intelligence

FEATURED COMPANIES

  • Audi AG
  • Bentley Motors
  • BMW AG
  • JAGUAR LAND ROVER LIMITED
  • Lexus Motors
  • Mercedes-Benz AG
The Indian luxury car market studied was valued at USD 1.06 billion in 2021, and it is expected to reach a value of over USD 1.54 billion by 2027, registering a CAGR of more than 6.4% during the Forecasts period 2022-2027.

With the spread of COVID-19, the sales of luxury cars were affected due to lower footfalls in the showrooms. Various automobile manufacturers were forced to temporarily shut their production as the supply chain was disrupted by the country-wide lockdown imposed by the government, which restrained the market growth.

Over long term as luxury car manufacturers are launching multiple models with various price ranges, along with user-friendly financing schemes, the demand for luxury cars is expected to rise in the country. Moreover, the demand for luxury SUVs has been growing rapidly in the country and is expected to continue during the Forecasts period, as they offer extra space and comfort. Major luxury car manufacturers, like Audi, BMW, and Mercedes are planning to launch new luxury models in the country at a competitive price.

Besides these factors, growing popularity of electric cars supported by active launches and future strategies of key players in the market expected to further support demand in the market during the Forecasts period. The market is also supported by new entrants into this electric luxury space in India, for example Jaguar ventured into the Indian EV space with its first all-electric car, I-PACE. Audi made its EV debut in India with the launch of the Audi e-tron and e-tron Sportback. Both the cars are available in the 55 Quattro variant while the standard e-tron gets a lower-spec 50 Quattro trim too.

Key Market Trends


Luxury SUVs are Witnessing Rapid Growth in the Country


Shifting consumer preference from luxury sedan and luxury hatchback to luxury SUV across the country is likely to witness major growth for the market. In order to meet the growing demand, international companies, like BMW, Mercedes Benz, Volvo, and Audi, are launching new models every year. For Instance,
  • In June 2021, Mercedes-Benz launched Mercedes-Maybach GLS 600 is the first SUV ever to hold the Maybach brand name.
  • In June 2021, Range Rover launched Range Rover Sport SVR, which is the high-performance iteration of Range Rover Sport. The SUV gets features such as heated front and rear seats, driver condition monitor aid, 360-degree parking aid and many other features.
However, the sales of luxury cars were affected by the COVID-19 pandemic in 2019 - 2020. Automobile manufacturers across the country were forced to temporarily stop their production, as the supply chain was widely disturbed, and customers were forced to stay indoors due to the nationwide lockdown imposed by the government. However, to prevent economic collapse, various state governments have started to lift the restriction allowing various manufacturers to resume the production of vehicles.
  • Volvo had the biggest growth among the luxury car manufacturers. The company’s new line-up of SUVs is more successful. In December 2019, Volvo Cars launched BS-VI compliant XC40 T4 R-Design petrol variant in India at a price of INR 39.9 lakh. According to the company, the XC40 is the only vehicle in the segment to have radar-based Active Safety features, like City Safety with Steering Assist, which activates at speeds above 50 kmpl and helps in collision avoidance.
  • Jaguar Land Rover (JLR) SUVs also witnessed significant growth in sales and accounted for over 50% of the total sales in the country. In February 2020, JLR launched a new BS-VI compliant Discovery Sport in India at a starting price of INR 57.06 lakh for the S model and INR 60.89 lakh for the R-Dynamic SE model.
Such aforementioned developments and instances in the market indicate optimistic enviornment in the Indian Luxury car market and hence such advancements likely to support growth of market over Forecasts period.



Electric segment Expected to Dominate the Market


Luxury electric vehicle market in India is getting popular, with the likes of Mercedes-Benz, Audi, BMW, Volvo lining up a large number of launches and state governments making a beeline to support Tesla's entry into the country. Mercedes-Benz, the leader in India’s luxury-vehicle market, has announced plans to introduce the EQS saloon later in the year. The car is likely to be priced closer to its petrol equivalent.

Attractive incentives for manufacturing of electric vehicle in India pramoting manufacturers to build electirc vehicle in the countyr. A GST rate of just 5% for electric vehicles, it is as high as 50% including cess for premium diesel or petrol-powered passenger vehicles is a key enticement for automakers to bring in electric vehicles.

Major luxury car maker are launching their new models across the country is likely to witness major growth for the market. For instance,
  • In January 2022, Mercedes-Benz announced for electric vehicle enthusiasts in India as it has bringing its flagship luxury sedan, the Mercedes-Benz EQS to India in 2022. Additionally, Mercedes-Benz has also announced that the Mercedes-Benz EQS will be locally produced in India, making it the first locally produced luxury electric vehicle in India. Interestingly, Mercedes-Benz was also the first automaker to launch a luxury electric car in the Indian market in the form of the Mercedes-Benz EQC.
  • In July 2021, Audi, the German luxury car manufacturer, is set to start its electric journey in India with the launch of the Audi e-tron. To give customers the widest range within the luxury EV segment, Audi India will offer the Audi e-tron in two body styles - Audi e-tron and Audi e-tron Sportback. Audi e-tron buyers will further have the choice of the Audi e-tron 50 and Audi e-tron 55. The Audi e-tron Sportback will be available in the e-tron 55 variant.
With the growing environmental concerns due to rising exhaust emissions, governments and environmental associations across the country are tightening emission norms. As a result, the demand for sustainable and eco-friendly transportation, such as EVs, is increasing, with governments offering higher incentives and subsidies to these vehicle owners.
  • Automakers are launching EVs even in developing markets. In January 2022, Mercedes Benz launched first luxury electric vehicle in India, the EQC SUV. The vehicle is powered by two asynchronous motors, one on each axle, producing a combined 408hp and 765Nm of toque. A floor-mounted 85kWh lithium-ion battery pack can deliver a WLTP-certified range of 400km on a single charge.
Additionally, luxury car component manufacturers are focusing on developing next-generation smart mobility technologies, such as autonomous driving, personal voice assistance, and retina recognition, which are expected to boost the sales of luxury EVs over the Forecasts period.



Competitive Landscape


Some of the prominent players in the market are Mercedes-Benz, BMW, Audi, Jaguar Land Rover, Lexus, and Volvo, among others. In India Mercedes-Benz, BMW and Audi are the top luxury car manufacturers. These car manufacturers have collectively reported sales of around 22,500 units through 2021. Major Luxury car brands are expanding thier network across the country. For instance,
  • In March 2022, Audi planned to develop the market in India by bringing in more brands and expanding the network across the country. Internationally, the electric SUV is available with two battery options - 52 kWh and 77 kWh - in multiple variants. Similar to the e-tron, the Q4 e-tron is offered in both SUV and coupe-SUV bodystyles.
  • In October 2021, Mercedes Benz has unveiled a new business model that has helped it boost car sales in India. As part of the new strategy, the luxury car manufacturer intends to offer benefits of 1-2 lakh INR on the selling price to its customers.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support


This product will be delivered within 2 business days.
Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Audi AG
  • Bentley Motors
  • BMW AG
  • JAGUAR LAND ROVER LIMITED
  • Lexus Motors
  • Mercedes-Benz AG

1 INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Buyers/Consumers
4.3.2 Bargaining Power of Suppliers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION (Market Size Value - USD billion)
5.1 By Vehicle Type
5.1.1 Hatchback
5.1.2 Sedan
5.1.3 SUV
5.2 By Drive Type
5.2.1 IC Engine
5.2.2 Electric
5.3 By Price Range
5.3.1 INR 20 Lakh - 50 Lakh
5.3.2 INR 50 Lakh - 80 Lakh
5.3.3 Above INR 80 Lakh
6 COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles*
6.2.1 Mercedes-Benz AG
6.2.2 Volvo AB
6.2.3 BMW AG
6.2.4 Audi AG
6.2.5 JAGUAR LAND ROVER LIMITED
6.2.6 Rolls-Royce Holding PLC
6.2.7 Bentley Motors
6.2.8 Lexus Motors
6.2.9 Porsche India
7 MARKET OPPORTUNITIES AND FUTURE TRENDS
Note: Product cover images may vary from those shown

A selection of companies mentioned in this report includes:

  • Mercedes-Benz AG
  • Volvo AB
  • BMW AG
  • Audi AG
  • JAGUAR LAND ROVER LIMITED
  • Rolls-Royce Holding PLC
  • Bentley Motors
  • Lexus Motors
  • Porsche India
Note: Product cover images may vary from those shown

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