There has been a remarkable surge in demand for luxury cars, especially among individuals aged 35 to 40. Over the past two years, the purchasing power of these buyers has grown exponentially. Even with luxury cars starting at around ₹50 lakhs, many buyers are not hesitating to spend more, with some even crossing the ₹ 1 crore mark.
In this State of The Economy podcast, Ronendra Singh talks to Santosh Iyer, the Managing Director and Chief Executive Officer of Mercedes-Benz India, to understand the nuances of the luxury car market in India.
They delve into various aspects, ranging from the sedan vs. SUV preference to the impact of fuel choices, taxation issues, and the growing popularity of luxury electric cars, especially among environmentally conscious consumers.
As the festive season kicks off, Santosh shares his perspective on the current market performance and what to expect in the coming months. He highlights that the demand for luxury cars is on the rise, with customers eagerly awaiting deliveries during the festive period, projecting robust growth compared to the previous year.
The conversation also delves into the role of electric vehicles (EVs) in the luxury car segment and the shifting demographics of buyers. Santosh emphasises that it’s not just about age; it’s about the mindset of buyers who seek technology, sustainability, and pride in owning EVs.
The conversation shifts towards SUVs and the availability of different options, revealing that the SUV segment is gaining traction. Santosh sheds light on the ratio of SUVs to sedans and the continued demand for diesel engines in luxury cars, emphasizing the benefits they offer.
The discussion touches on government policies, including biofuels and EV incentives, and the potential impact of new entrants like Tesla in the Indian market. Santosh believes Tesla’s arrival will accelerate EV awareness but notes that they cater to different segments.
Finally, Santosh addresses the impact of higher interest rates on luxury car buyers and the industry’s efforts to provide competitive financing options.