The Indian luxury car segment may account for just one per cent share in the total sales of 3.9 million passenger cars last year, but it is poised to rev up, says Naveen Soni, President, Lexus India.
He pointed out that India’s efforts to emerge as the third-largest economy by 2030 augurs well for the growth of the luxury car segment in the country, given the 3.5 per cent share enjoyed by high-end cars in Japan; the whopping 16 per cent share in China and 18 per cent in Europe.
“Overall the Indian market is on a positive growth trajectory with the luxury car industry this year set to cross the 40,000 units sales it achieved in 2018,” Soni told businessline.
He was in Kochi for the opening of the new Guest Experience Centre of Lexus India here at Nippon Towers.
Growth lane
According to him, the growth has been phenomenal in the passenger car sector in India, which grew at 22 per cent overall in 2022, with the luxury car segment clocking a 52 per cent growth. Of this, Lexus India witnessed a growth rate of 76 per cent, he said.
He cited some enabling factors for the growth in the luxury car segment which included change in the mindset of people, especially youngsters who after Covid-19 displayed a good spending capacity; pent up demand; and the effect of the “You only Live Once” concept, which contributed to the surge in the business of all luxury products business including vehicles.
All these aspects have led to new entrants in the market. Moreover, youngsters wishing to own a luxury car as the first vehicle in their house also boosted the sales, he added.
On the chip shortage and geo-political issues hitting demand in 2023, Soni said the demand-supply situation has considerably improved compared to the pandemic time, when there was a semiconductor shortage. Likewise, the logistical issues connected with high freight rates and container shortage have also started resolving themselves, which would benefit the industry as a whole this year.
“If everything goes well, the luxury car industry is set to cross the 40,000 vehicle barrier recorded in 2018,” Soni concluded, adding that Lexus India plans to launch one more model in the LM series in the second quarter taking the total car models in the country to seven.