Luxury cars play a larger role in a healthy economy than what is generally understood. They are meant to reward achievers in a performance-based economy. Do they really do so?

In India, the situation is far from ideal. Buyers of luxury cars get a raw deal. Thanks to heavy taxes, they pay much more and get a product that falls awfully short on performance. All luxury car models sold in India are little more than direct imports from the West, even though the environment here is very different. The tax — which can be as much as the cost of the car itself — does not translate sound road infrastructure.

Granted, all these cars have strong brands and they look awesome in showrooms. But the problem is Indian luxury car buyers are not getting their money’s worth. This fact is best highlighted in what recently happened in Aurangabad. In 2010, a group of people bought 150 Mercedes Benz cars at pleasing rates, thanks to a bulk deal. Today, most of the cars have either been sold off or are languishing in garages. Reason: the incompatibility between luxury cars and Indian roads.

The road not taken

Why this incompatibility? It's basic problem is the way in which luxury cars are sold. In the West, the cars are sold on their very high horsepower rating of their engines, frills such as hand-made upholstery, and peripheral technologies such as lane departure warning system. Most of these features mean nothing for Indian buyers.

While every luxury car maker claims excellence in engine technologies, there is an imperceptible difference between the mileage of luxury cars and the cars that cost half their price. In fact, at almost half the cost, cars such as Honda Accord, Toyota Camry come close to luxury cars in engineering and features. Of course, they are far behind in terms of appeal and brand value — but we are talking about the core product. Shouldn’t a car costing twice or more than an ordinary car be at least technically better?

Back to basics If the Indian customer has to get value for money, luxury car-makers should design completely new models that are compatible with Indian conditions. That will mean going back to the basics of automobile engineering and dabbling in unglamorous and, sometimes, unprecedented features. For example, since India sees higher dust in the air, this necessitates reviewing a host of sub-systems — from air filters, air-conditioning and various sealants to paint technologies. New paint technologies need to be developed to ensure cars do not lose gloss in such an environment.

Another major area to focus on is suspension. Most luxury car-makers simply stiffen springs and slightly increase the ground clearance to tackle Indian roads. The effort has to go much further. Manufacturers should consider using active or semi-active suspensions. There are technologies that regenerate power from suspension, while smoothening the ride.

Not just the badge The West’s high speed-oriented design makes cars go for what is called ‘lower ground clearance’ to reduce air drag, but in India, they need to significantly increase ground clearance. The wheel size too must be significantly larger, along with longer travel of suspensions.

An interesting innovation to consider is to make rear wheels swivel, at least while taking sharp turns. This will enable even a large luxury car to negotiate very tight corners and take U-turns even on narrow streets. Another objective must be to make cars robust. It is easy to find mountainous speed breakers or deep potholes on highways. Making them resistant to dents and easy to repair is an important requirement. The bottom line: luxury cars must have superior technology and they must not rely on their badges alone to win customers.

(The author is Vice President, Sky Tran India. Views are personal.)

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