Luxury carmakers have lined up about 70 launches – including all-new models, facelifts and variants – this year, which is almost double of Covid-hit 2020 when lockdowns and supply chain challenges forced most firms to defer rolling out of new vehicles.
The biggest product action will come from BMW, which plans 25 launches this year, followed by market leader Mercedes Benz with 15 new products planned and Jaguar Land Rover with 10. Audi and Volvo have lined up seven and five new launches, respectively, this calendar while another 6-8 launches will come from sports car and super luxury car makers such as Porsche, Lamborghini, Ferrari, and Rolls Royce.
Mercedes Benz India managing director Martin Schwenk said the industry will get back to a normal growth track in 2021-2022 with customer base will grow on the back of financial growth in the Indian economy.
“We expect to grow by over 40% for the next two years,” Schwenk told ET. “The fundamentals of GDP growth and per capita will drive demand. The momentum is there; it is carried forward by new products. There is a generally positive market outlook. New products will definitely help us to sustain the momentum. It will be a completely fresh portfolio of 15 cars.”
Industry officials expects the luxury car market to record sale of 28,000 to 33,000 units in 2021, up from 20,000-21,000 last year.
As the economic recovery gains momentum and sentiment improves on the back of Covid-19 vaccination drive and fall in new infections, vehicle makers are confident of a strong double digit growth.
Balbir Singh Dhillon, head of Audi India, said the worst is over for the luxury car market. It will be a busy 2021 from Audi with a clear strategy focused on four pillars on strength – customer centricity, digitalisation, network and products, he said. The company aims to more than double its volumes in 2021.
BMW expects a minimum of 25-30% growth in 2021. Vikram Pawah, MD of BMW India, said the company has seen rapid recovery month on month after the third quarter of 2020.
“We will aim to outpace the market because of 25 new launches planned for 2021,” Pawah told ET. “This has to be the highest level of product action from the company. The demand for personal mobility is moving up, it is evident from consumer behaviour. With the time to spend with our family, there is a lack of international and local travel, there are a lot of driving holiday concepts coming up as well, which is increasing the demand for premium and luxury cars as well.”
Rohit Suri, MD of JLR India, said the British luxury carmaker owned by Tata Motors has planned 10 new product actions for 2021 on the back of quick recovery.
LUXURY EVs DRIVING IN
It is going to be an action packed year for luxury electric vehicles, too, with Jaguar I-Pace, Mini Cooper electric car, Audi E-Tron, Porsche Taycan, Tesla Model S and Volvo XC40 Recharge expected to hit the roads.
A Volvo Cars India spokesperson said the Swedish luxury carmaker expects its sales pace to further improve in 2021 on the back of all-new S60 to be launched in March followed by all-new electric vehicle XC40 Recharge.
While the industry is bullish, experts foresee bottlenecks of supply chain and high taxes continuing to impact overall market recovery.
Ravi Bhatia, president of automotive industry analytics firm Jato Dynamics India, said the premium vehicle segment has struggled for growth in India with sales halving since 2018 from 41,000 to about 20,000 in 2020.
“There are several factors holding back the growth of the luxury market in India,” he said. “The OEMs (original equipment manufacturers) continue to struggle with growth in face of heavy taxation and limited size of ultra HNIs (high net-worth individuals) in India. Also, culturally, Indians are uncomfortable with bold and in-your-face display of wealth. This has forced luxury carmakers to play on backfoot, be it in product, pricing and distribution strategy.”
Bhatia said sluggishness in the market may continue in 2021 and supply side challenges, especially on the semi-conductor front, may play a spoilsport due to high dependence on chipsets in luxury cars. This may not allow the industry to reach the 2019 sales levels of 33,000 units, he said.
While the Indian luxury car market is struggling, the Chinese luxury car market has grown from strength to strength to reach 3.6 million last year.