The Hindu Business Line : Luxury car sales rise in 2008; imports drop

New Delhi, Feb. 3 Car imports have fallen in the 2008 calendar year as increasing number of consumers chose to buy locally assembled models by foreign car makers.

Imports fell by 14 per cent to 4,951 units during the same period, according to estimates by JD Power and Associates. At the same time, domestic sales for many of the luxury car makers rose steadily.

The decline in imports is attributed to the increase in the assembly operations of certain models by car makers such as BMW and Audi which contributed to the rise in sales.

Since 2006, luxury cars (those above Rs 25 lakh) have grown from less than 5,000 units in 2006 to 7,500 units last year.

The market is expected to touch 10,000 units by 2010. Companies say that despite the economic conditions, newer products and dealerships will expand the market by increasing the penetration of these cars in newer cities.

“We will watch the sales over the next two-three months before we decide our annual sales targets. But we hope to do better than last year,” said Mr Peter Kronchnabl, President, BMW India.

Similarly, Mercedes Benz too expects to maintain the sales momentum in such a difficult situation.

“The first three quarters were very strong for Mercedes-Benz India and despite a lean fourth quarter, we have been able to achieve good results in 2008.

The year 2009 will be a challenge in view of the current economic situation; however, we are well poised to retain our leadership in this market-space,” said Dr Wilfried Aubur, Managing Director and Chief Executive Officer, Mercedes Benz India.

According to a market research analyst of JD Power, the fall in car imports could have been due to a shift among consumers in buying models which are locally assembled and may cost less compared to those which come with more than a 100 per cent import duty. This year, both BMW and Mercedes plan to launch more models to boost sales. BMW has introduced its seven series model a few days ago and also plans to launch its sports utility vehicle X6. Porsche, too, whose models such as Boxster and Cayenne cost more than Rs 50 lakh up to more than Rs 1 crore said it will continue its launch plan for the year.

"The economic slowdown is impacting auto makers worldwide but 2009 is an important year for India as we introduce the first four-door Porsche, the Panamera, to the world. We are confident of increasing our sales in the country with the Panamera which should reach India in the last quarter of 2009," Mr Rod Wallace, Managing Director, Precision Cars India.

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