The Hindu Business Line : A year of imports and luxury marquees

The flow of big launches, big brands and luxury imports is unlikely to slow down next year. On the contrary, it will pick up speed and 2008 could well witness a host of new cars and bikes both imported and made in India.

— S. Muralidhar

The Rolls-Royce Drophead Coupe… Bespoke engineering and luxury for the well-heeled.

It would seem that Indians have an insatiable appetite for everything imported. And 2007’s biggest car launches showed this to be true even in the automobile industry.

However, in the case of new imported cars, the reasons can be argued both ways. Luxury car manufacturers were looking to break into the Indian car market, which was, till early 2007, extremely under-represented. On the other hand, the Indian car buyer has had to deal with restrictions on imports and the latent demand for these cars, as a result, has only been rising like a tide.

Lapping up luxury

What is more, clearly luxury car buyers here, who have had to contend with only one manufacturer and its cars, have simply lapped up the sudden surge in the choice of brands and models that were launched in 2007.

The entry of competing luxury imports and the increase in choice that they brought for buyers in this segment has actually gone on to dramatically expand the market.

The monthly sales data for luxury cars sold in India during the eight months ending November 2007 offers a telling picture. And it reconfirms the old saying that competition is good both for the consumer and the very manufacturers who used to enjoy a virtual monopoly. That is what happened to the small car segment starting in 1999 and that is what has happened to imported luxury cars in 2007.

According to the official sales numbers collated by the Society of Indian Automobile Manufacturers (SIAM), the total sales of passenger vehicles during the eight months ending November 2007 has risen by about 13 per cent. On the other hand, during the same period, sales of luxury passenger vehicles (priced above Rs 20 lakh), including both semi-knocked down (SKD) and completely built units (CBUs) have almost doubled.

The big jump in numbers has come for traditional German rival luxury marquees Mercedes Benz and BMW. For Mercedes Benz, which, in the absence of competition, has been a virtual monopoly for quite a few years, 2007 has not been a bad year despite the entry of quite a few new luxury car brands.

With a quick opening up of its imported offerings and crucially by bringing in the new S-Class, Mercedes Benz has actually sold more than it did last year. Whether it was spurred on by the competition’s plans or not, Mercedes also speedily launched its other imports including the CLS-Class sedan, the SLK sports car and the ML-Class sports utility vehicles.

More join the party

For BMW, which launched its big bang Indian operations with the opening of its Chennai-assembly plant in March, the year has clearly been a successful one. Starting only with the 3-Series, BMW has quickly ramped up and rolled out pretty much a large chunk of its international portfolio for Indian buyers to choose from. Launched in quick succession, the 5-Series sedans, the imported 7-Series saloon, and the X5 and X3 sports utility vehicles are all now available here.

The others have joined in to celebrate the Indian car buyer’s urge to go global. The other big German brands Volkswagen, Audi and Porsche rolled out their big selling models for Indian buyers, with Audi launching the A8 saloon and the Q7 SUV. Porsche brought in the Cayman S and the Cayenne Turbo SUV. And Volkswagen made its India debut with the Passat sedan. The big Swede, Volvo Car Corporation, also finally made it to India and chose to mark its foray with the launch of the S80 sedan and the XC90 sports utility.

Not to be left behind, super luxury carmakers Rolls Royce and Bentley Motors too shipped into India their latest models.

Rolls Royce added the Drophead Coupe to its India portfolio and Bentley introduced the Continental GT. Other notable imports during 2007 were the Nissan Teana and the Mitsubishi Montero. The other significant Japanese imports included the Honda CR-V and the new Suzuki Grand Vitara.

Imports aren’t going to be restricted only to vehicles with four-wheels. The discovery of the great Indian buying class means that even two-wheeler companies are hoping to cash-in on our newfound urge to splurge on hot new wheels. And so, despite the entry of Harley-Davidson still hanging in mid-air (even after the hyped joint Indo-US announcement), the other big bike makers are moving ahead with their plans.

The first to launch its super bikes will be Yamaha Motor India, which is planning to first bring in the 1000cc YZF-R1 Super Sports and the 1,670cc Torque Sports MT-01. These two top-of-the-line iconic Yamaha bikes are to be priced upwards of Rs 10 lakh. The next big bikes could come from Suzuki, which according to market sources is also looking at importing the Hayabusa.

The most significant domestic car launches in 2007 were the Mahindra Renault Logan, the Maruti Suzuki SX4, the Hyundai i10 and the Chevrolet Spark.

Flavour of 2008

Italian biggies Ferrari and Alfa Romeo could make their India debut next year, and BMW is seriously contemplating launching the Mini Cooper here. BMW may also launch the new X6 SUV after it makes its international debut by the second quarter of 2008. Mercedes Benz has drawn up the roadmap for the launch of the award winning new C-Class sedan in India and this car just might stir up the luxury segment and bring fresh choice to the buyers in this category.

Of course, 2008 is likely to be remembered more for the potential launch of a whole new segment of passenger car. The much talked about one lakh car or people’s car from Tata Motors will be unveiled in January at the Auto Expo and could roll out of the company’s plant by the third quarter of 2008.

This new car will create a new A-passenger car segment that is likely to witness competition pretty soon with potentially competing cars being launched by Maruti Suzuki and by the Bajaj-Renault combine. At the moment, what the final product looks like or what it is finally priced at seems to be of little consequence, the people’s car has already captured the imagination of millions of Indians.

Tata Motors is slated to launch new versions of its current small car — the Indica, the new Indigo sedan and also the newly redesigned, ‘re-speced’ Sumo UV.

India-made launches

In the meanwhile, the high-profile, India-made cars that we can look forward to in 2008 include, among others, the new Honda Jazz, the Suzuki Splash, the Skoda Fabia, the new Toyota Corolla, the Fiat Linea and Grande Punto, the new Honda Accord, the GM Chevrolet Captiva SUV and the Renault Sandero.

Just about six years ago, India was just not there in the marketing maps of any of the major super luxury car manufacturers. Today even the Euro 1.1 million Lamborghini Reventon super sports car is being offered for buyers here.

While the world’s super premium brands line up for making an entry into India, the icing on the cake during 2008 could well be an Indian company taking over the reins of Jaguar and Land Rover, quintessentially British luxury brands that are known to have been preferred by the Queen herself.

Well, that will be something to look forward to.

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