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Would entry-level luxury cars make it to the garages of first-time buyers?

S Ronendra Singh New Delhi | Updated on October 22, 2020 Published on October 21, 2020

Many options are available in the used luxury car segment, which are bigger in size and have more features.

These entry-level luxury cars are being offered at steep prices, at which options from other premium car makers are available

Last week, luxury car makers Audi India and BMW Group India launched two new products in the entry segment — the Q2 sports utility vehicle and 2-Series Gran Coupé respectively — to woo customers during the festive season.

 

The Audi Q2 is priced between ₹35 lakh and ₹48.89 lakh (ex-showroom, India), while the prices of BMW 2-Series Gran Coupé are kept at between ₹39.30 lakh and ₹41.40 lakh (ex-showroom).

But at such steep prices, would entry-level luxury cars attract first-time buyers?

According to some of the analysts tracking the industry, a number of options are available in these price ranges from premium car makers, and with similar features. Also, many options are available in the used luxury car segment, which are bigger in size and have more features.

Also read: ‘Audi’s long-term strategy for India remains intact’

“These entry-level luxury cars are smaller in size for that price. Also, many options are available at these prices point from similar brands. In India, customers look for space and features, which many premium car makers are now offering at these price points,” Puneet Gupta, Associate Director at IHS Markit, said.

Another Delhi-based analyst said that there are not many first-time buyers of such luxury cars in in India every year. There are around 40,000 customers every year in the luxury car market and most of them are repeat customers — in terms of upgrades or a second car.

However, companies have a different view. As per Vikram Pawah, President, BMW Group India, the 2-Series Gran Coupé is an entry-level executive sedan for people of younger age who like to drive the car themselves.

“The 2-Series is targeted at much younger, urban, cosmopolitan customers who are looking at design statement and are not happy with a normal hatchback, or a sedan or an SUV, because they were looking at the luxury segment in order to extend their personality level,” he told BusinessLine recently in an interview.

When asked about the pricing, which is similar to the starting price of a 3-Series, Pawah said that the 2-Series is a smaller car, but with a lot to offer. For instance, it can do 0-100 km in just 7.5 seconds and a lot of technology that usually goes into 7-Series, or 5-Series, or 3-Series.

“So, this is for the younger customers who want to come to the BMW brand much earlier in their lives. These people like to drive themselves and live life to the fullest. The 2-Series is a grand success worldover, and I think it will be the same in India as well,” he observed.

Agrees Som Kapoor, Partner, Automotive sector at EY India, saying that there still will be buyers for such entry-level luxury cars as some buyers would want to upgrade from near-premium to luxury segment and a luxury badge in your garage always is a different experience.

“Owning a luxury car is a different experience and buyers of such cars would have owned a luxury car already. They will go for such entry-level cars too for the brand and relations they have with such brands,” Kapoor said.

Also read:Mercedes-Benz to make AMG 43 in India

The companies are also launching these global models in India so that they are able to offer a complete portfolio of their products here. Though it’s a little late in the day, these launches are being done during the festive season, which is a great time for auto sales.

“Our sixth launch for the year — the Audi Q2, is another solid step in our endeavour to provide Indian customers with a wider range of choices from the Audi portfolio. We are happy that we could bring it to customers right in the middle of the festive season,” Balbir Singh Dhillon, Head of Audi India, said.

Mercedes-Benz India, which was also supposed to launch the A-Class limousine (another entry-level offering), by now, will be launching it in December. But, the company is confident that it will add another ‘star’ to the company’s portfolio in India.

“We had showcased the car during the Auto Expo earlier this year and the feedback we got is very strong. So, I am confident. Unfortunately, (it will take) a few more weeks to bring it to the showroom, but overall I am very positive to expand our product portfolio,” Martin Schwenk, Managing Director and Chief Executive Officer, Mercedes-Benz India, said.

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Published on October 21, 2020
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