The Hindu Business Line : Corporate India keeps sale of premium cars on fast track

New Delhi, Oct. 2 BMW, Mercedes, Honda Accord seem to have become the preferred luxury cars of Corporate India. This has been spurred by the growing appetite for providing premium and luxury cars to employees, in turn keeping the sales of premium cars on the fast track.

BMW A5 sales went from 122 to 471 units during April-August 2008 while Mercedes went from 421 to 445 units. Overall BMW sold 1,166 units against 1,421 by Mercedes.

“About 25 per cent of our sales comes from corporates across different sectors,” said Mr Suhas Kadlaskar, Director, Corporate Affaires and Finance, Mercedes- Benz India.

A spokesperson for BMW India also said that 20-25 per cent of its cars were sold to companies. During April-August, premium cars sales comprising models like BMW 5 and 6 series, Mercedes Benz E-class range of cars, Honda Accord and a Toyota Camry, recorded a 38 per cent growth at 3,978 units. Luxury cars including BMW 7 series and Mercedes S Class also rose 36 per cent at 344 units. While the sales of premium and luxury cars have grown the fastest compared to the mass and the mid-size sedan segment, its base is also much smaller. This results in the premium segment showing a higher increase than the compact car segment.

Premium cars are defined with a length of 4,701-5,000 mm and cost in the range of Rs 15 30 lakh as compared to luxury cars that are 5001 mm and above in length and sell as high as Rs 70-80 lakhs and Rs 1 crore. The demand for such cars for top executives is also fuelling the business of car leasing companies. Global players like Carzonrent, the licensee for Hertz in India and Leaseplan say that they are seeing an increasing proportion of demand for top end models.

“This year, of the 400 cars that we have been leasing monthly to business conglomerates, around 50-55 per cent is in the executive and premium segment,” said Mr Sanjeev Prasad, Country Manager, Leaseplan India. The company, with a client base of 900 corporates in the country and is one of the largest fleet and vehicle management company globally, says that business has grown 30 per cent over the last year.

Carzonrent which bagged an order for supplying a fleet of 75 limousine cars to Emirates Airlines, is expanding its portfolio for such models in view of the demand from tourism and aviation industry.