[MadinMumbai]

In a way these figures are a true reflection of our economy, our infrastructure and our fears. The taxes are usurious for sure. But they are so across the board.

The first thing that jumps out is the small number who can afford a luxury car despite such a huge population. This number has been consistent in percentage terms, more or less, over the last decade or so. Growth, though increasing, is a one step forward and two steps back dance. GDP growth, though much touted, isn't reflected in personal spending ability, capacity or attitude.

The second thing is the lack of confidence in our infrastructure. Quite a few people who could, maybe, extend resources to buy a luxury car, simply don't, because of the driving conditions. The thinking probably goes - Do I want to drive a 50-70 lac car over a potholed road, stuck between an auto rick and a thella, or should I buy a 20 lac car that will get abused anyway?

The third aspect is that the difference between a 20-30 lac car vs a 50-70 lac car, taking the road and driving conditions into account, is smallish. Incremental differences make the decision to buy a less expensive car easier.

And finally, this is anecdotal because I have not experienced luxury car ownership, quality issues and their amplified reporting causes doubts in the mind of prospective buyers. It seems there are too many dissatisfied luxury car owners in India. Very often one sees a luxury car on a flatbed, and each time it erodes the will to buy a top brand. Expensive cars = bullet proof, used to be the expectation. But that contention is being challenged. One is learning that a Honda City or Hyundai Verna are probably more reliable than an expensive German beast. Lack of readily available spares and service options also play on the mind.

All in all, unless something changes drastically, the luxury car market is going to remain small for the next decade. Till we have a better inner city driving experience it is unlikely that people will spend 2-3x the amount on a badge.

[vjbox]

Originally Posted by MadinMumbai

In a way these figures are a true reflection of our economy, our infrastructure and our fears. The taxes are usurious for sure. But they are so across the board.

The first thing that jumps out is the small number who can afford a luxury car despite such a huge population. This number has been consistent in percentage terms, more or less, over the last decade or so. Growth, though increasing, is a one step forward and two steps back dance. GDP growth, though much touted, isn't reflected in personal spending ability, capacity or attitude.

The second thing is the lack of confidence in our infrastructure. Quite a few people who could, maybe, extend resources to buy a luxury car, simply don't, because of the driving conditions. The thinking probably goes - Do I want to drive a 50-70 lac car over a potholed road, stuck between an auto rick and a thella, or should I buy a 20 lac car that will get abused anyway?

The third aspect is that the difference between a 20-30 lac car vs a 50-70 lac car, taking the road and driving conditions into account, is smallish. Incremental differences make the decision to buy a less expensive car easier.

And finally, this is anecdotal because I have not experienced luxury car ownership, quality issues and their amplified reporting causes doubts in the mind of prospective buyers. It seems there are too many dissatisfied luxury car owners in India. Very often one sees a luxury car on a flatbed, and each time it erodes the will to buy a top brand. Expensive cars = bullet proof, used to be the expectation. But that contention is being challenged. One is learning that a Honda City or Hyundai Verna are probably more reliable than an expensive German beast. Lack of readily available spares and service options also play on the mind.

All in all, unless something changes drastically, the luxury car market is going to remain small for the next decade. Till we have a better inner city driving experience it is unlikely that people will spend 2-3x the amount on a badge.

Well said, I certainly agree here that the Luxury car market has remained largely the same percentile and will continue to be a niche segment in a country like India. The absolute rich/ opulent class won't really be bothered with such burgeoning prices as for them traveling in utmost class and comfort is the number one priority while retaining exclusivity and thus these top marquee brands becomes their default choice. So a delta of 10-20 lacs isn't going to leave a dent on them. Even then, most of such high profile houses end up having a Innova or a Carens as a secondary option or a daily beater. Its with the segment below them ( the HNIs and some of amount of upper class) who are caught up with conflicting and difficult choices to make given the current market trends. Also we have reached a point where the lower segment products are clearly getting a lot more competent that a lot of the cutting edge tech is tricking down to these products. This is where prudent buyers will evaluate thoroughly before taking the plunge.

For instance when we were in the market for a new ride recently, we did look at the usual suspects ( BMW, Merc, Audi, Volvo etc) but given I am guided so much by 'value for money' principle more than anything, we settled for a Kodiaq which seemed to tick most of our boxes. A Volvo in 2018 when we bought one seemed value for money but the same Volvo in 2023 doesn't look so given the price inflation. Deletion of common features from some of these Luxury brands is a also a case of concern as we now end up paying more for lesser features. Again this is purely from what I perceive as value for money and isn't a blanket approach.