Younger clientele driving luxury car sales in India
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Younger clientele driving luxury car sales in India


COVID may have induced the ‘you only live once’ philosophy in the Indian car market as Audi, Lamborghini, Mercedes-Benz, and BMW report increase in demand despite industrial supply chain issues of late

COVID may have induced the ‘you only live once’ philosophy in the Indian car market as Audi, Lamborghini, Mercedes-Benz, and BMW report increase in demand despite industrial supply chain issues of late

Luxury automobile makers like Lamborghini, Mercedes Benz, and BMW, are all seeing strong demand for their models in the premium end, despite the COVID-related disruptions, largely due to a shift in customer profile to younger, first-generation entrepreneurs, who believe in the ‘you only live once’ philosophy.

Varun Kalyanasundaram, a 33-year-old director at Chennai-based Polimer Media, bought his first luxury car nearly 10 years ago “because of the sheer driving pleasure, technology and most importantly comfort.”

Mr. Kalyanasundaram currently owns a BMW X7, Mercedes Benz S class, Mercedes Benz GLS, an Audi E-tron, and is now eyeing the Mercedes Benz Maybach GLS. “I drive by myself. I don’t have a chauffeur. I like long drives and the pleasure of driving is most important. The technology should be included, but I need comfort. That is it.,” he says.

Sharad Agarwal, Head, Lamborghini India, says there has been a shift in the customer profile over the years. “We are seeing younger, first-generation entrepreneurs who are choosing Lamborghini. From founders of successful start-ups to an increasing share of women buyers, the demand pool for Lamborghini has grown immensely over the past few years.”

2021 was a record year for Lamborghini, the prices of which start from ₹3.16 crore (ex-showroom) and go up to ₹10 crore or more based on the level of customisation chosen by the customers. The company had delivered 69 cars in India that year.

Mercedes Benz, which has seen nearly 29% of sales coming from the more than 1 crore segment now as against 12% in 2018, says there are several factors contributing to this change. Firstly the company has made a conscious decision to offer products that are fully equipped and is “not offering entry models because, when the customer wants a luxury product, they really want the best in their price bracket and that by itself creates a clear aspiration also in the pricing,” said Martin Schwenk, MD & CEO, Mercedes-Benz India.

Mr. Schwenk also notes that “the buying power is there and customers are willing to spend money and more than maybe a year ago.” “For the S class, the average customer age has come down to 38, and for C Class it is 35 years, which means a lot of customers are also very young and these customers have different behaviour. They are far more conscious of living in the now. So, we see an overall trend, perhaps helped by COVID, in which people want to spend on themselves,” he adds.

Echoing similar views, Naveen Soni, President of Lexus India, says there is a change in customer mindset. “I would say that the YOLO effect – you only live once – was very much pronounced in the market. People started to look at luxury as not just luxury, and as such, they wanted to spend on their lifestyle. ‘You only live once’ means that whatever you have to do whatever you want within this life span and you want to enjoy the benefit of the hard work that you put in.”

Mr. Soni adds that the pandemic resulted in a lot of people becoming more aware of the “fragile nature of life”, and wanting to “live it up”.

For BMW Group India, too, the demand for high-end cars has been going strong. Company president Vikram Pawah says within the luxury circle, there are those who want to be further differentiated by owning only the best-in-class. Additionally, the customer base for luxury cars has evolved tremendously in the last decade. “Apart from traditionally wealthy families, a new group of achievers who have a global outlook, are well-traveled, and have an eye for luxury products, has emerged. While generation X has adapted to become tech-savvy, for millennials and generation Z, technology and artificial intelligence are an indispensable part of daily life. So naturally, we see a growing trend towards cars that have strong human-tech interaction which makes mobility convenient and luxurious,” Mr. Pawah adds.

In fact, the growth for this segment has remained resilient even during the pandemic, he notes.

Balbir Singh Dhillon, Head of Audi India, says the company is seeing growth and expects it to continue in the months ahead. “We have a good order bank for our top-end cars, including the Audi e-Tron, Audi Q8, and our RS performance models. We are also preparing to launch our flagship sedan, the Audi A8 L that sits at the top of our product portfolio,” he said, adding that for the top of segment, purchases are primarily driven by sentiment.

“While sales have been stable and have even grown in the last few quarters, we have to see if this sentiment will sustain when things completely normalise. We strongly feel that this is an opportune moment for the government to use this positive sentiment as a springboard to bring about reforms like rationalisation of duties/GST/cess/road tax structure on luxury cars, which, in turn, will help the segment to grow and see its full potential,” Mr. Dhillion says.

Ashim Sharma, senior partner & group head at Nomura Research Institute, says this trend is mainly on the back of the fact that the customer segments buying these vehicles are the ones who run large businesses and have seen good earnings. The stock market has also reflected the same till very recently. “In addition, the launch of performance variants by the luxury car makers which are priced higher are being picked up by the younger generation in such households driven by the desire to own something exclusive and/or are driven by superior driving dynamics/acceleration.”

Increased demand from beyond metros has also helped strong demand for luxury cars. Lamborghini’s Mr. Agarwal adds that while New Delhi, Mumbai, and Bengaluru are still its bigger markets, the company is seeing a definite increase in demand from non-metro cities, with almost 25% of sales now from non-metro cities. “Today you can find a Lamborghini in Jodhpur, Indore, Ludhiana, Kanpur, Lucknow, Kochi, Kozhikode, Salem, Udupi, Madurai, and many more. This year, we have already delivered the first Lamborghini in the North-East, in Shillong, and the first Lamborghini in Daman,” he says.

Mr. Dhillion adds that while the brand continues to see good demand from cities including Mumbai, Delhi, Bengaluru, and Hyderabad, markets like Ahmedabad, Guwahati, Kolkata were seeing good demand as well.



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