Luxury car sales in 2019 witness steepest fall in more than a decade
BusinessToday.In January 9, 2020
Luxury car sales in India in 2019 saw the biggest fall in over a decade. The drop came amid an economic downturn, high import tariff and the anticipation of relief in goods and services tax (GST) rates which weighed on demand.
According to industry estimates, around 34,500 to 35,500 luxury cars were sold in India in 2019 as against 40,340 units sold in 2018.
However, several industry leaders told The Economic Times that they expect the demand to revive after April 2020 when BS-VI emission norms come into effect.
Martin Schwenk, MD, Mercedes-Benz India acknowledged that although 2019 was a "challenging year", the auto company together with its dealer partners continued to invest in customer-oriented initiatives and did not change any of its plans significantly.
"(It) got us back to positive growth in the last quarter. We also had a good festive season where we were able to generate positive sentiments in the market," Schwenk, who is also the CEO of Mercedes-Benz India told the news daily.
"Mercedes-Benz continues to remain optimistic on the luxury auto market in India in the mid to long term, and we are positive with our 2020 outlook. The company will launch a vehicle every month in 2020 to buoy volumes," he added.
Luxury vehicles constitute less than 1.2% of the entire automobile market in India, in comparison to 13% in China and 10% in the US.
"Recovery in the overall economy, additional measures undertaken by the government to reduce GST, import duties, registration taxes on (luxury) cars and support by banks/NBFCs to offer easy access to loans for dealers and customers will help expand the market and boost the overall industry," Balbir Singh Dhillon, head, Audi India told the news daily.
He also expects the luxury car segment sales (in the local market) to remain flat in 2020, and expand subsequently.