As the number of rich people grows in India and the affluent are willing to loosen purse strings for luxury items, premium brands are flying off the shelves. A large number of foreign brands from FMCG to apparel to cars are making a beeline for India to tap an emerging luxury market. The latest is Tata Motors-owned British brand Jaguar Land Rover (JLR). It plans to start assembling the flagship Range Rover model as well as the Range Rover Sport in India for the first time. They join other JLR models that are already assembled at its Pune plant — the Range Rover Velar, Range Rover Evoque, Jaguar F-PACE and Discovery Sport.
This model of Range Rover has never been produced outside the UK. What pulls Jaguar Land Rover to India is its growing luxury car market. The local assembly will translate into a 18-22% price reduction which will sharpen the company’s competitive edge in India. The luxury carmaker plans to launch at least half a dozen new models from the JLR stables, both ICE and EV (internal combustion engines and electric vehicles), as it seeks to capitalise on the growing number of high-net-worth individuals in the country. This is the most aggressive push by JLR since it entered the Indian market in 2009.
Luxury car market shifts to high gear
Luxury car sales in India touched a record high of 42,731 units in CY2023, up 20% year-on-year, according to Jato Dynamics, thanks to growing disposable income and the propensity among buyers to upgrade after the Covid-19 pandemic. The trend is expected to continue in 2024, fuelled by new launches and rising aspirations.
2023 was also a year of record sales, albeit on a small base, for super-luxury cars that are priced above Rs 2 crore. Lamborghini, whose models start from Rs 3.8 crore in India, sold 103 units last year as against 92 units in 2022. Meanwhile, luxury sports carmaker Porsche reported its best retail sales in India, with 914 units in 2023, up 17% from 2022.
SUVs drive luxury car sales
With growing affluence and appetite for adventure among Indians, global luxury automakers are actively broadening their SUV offerings to lure India’s elite with the latest tech, electrification and ultra-luxurious features.
Luxury car makers such as Mercedes-Benz, BMW and Audi are set to launch several new sport-utility vehicle models over the next three months, hoping to further deepen their foothold in this growing segment fuelled by evolving lifestyle trends and changing preferences of India’s affluent buyers.Such premium vehicles priced at more than Rs 50 lakh currently make up as much as 60% of sales at these companies, attracting a broader set of buyers including families and adventure enthusiasts, according to data collated by Jato Dynamics. Versatility and imposing road presence of SUVs over luxury sedans is finding increasing favour among Indian buyers. Mercedes-Benz with the largest portfolio of a dozen SUVs, grew sales by 41% in Q1 2024 “buoyed primarily by record sales of GLA, GLC, GLE and GLS SUVs in the first quarter of 2024 and we expect this demand to remain strong in coming months,” said Santosh Iyer, MD, Mercedes-Benz India.Iyer said the company is seeing strong demand for its top-end SUV models as more customers are now preferring road trips for intercity travel–either for business or leisure. Mercedes-Benz SUVs retail from Rs 52 lakh for GLA to Rs 4 crore for the AMG G 63. It plans to launch a facelift of its GLB SUV soon.
Led by models of iconic SUV Range Rover, JLR India sold a record 4,436 units in calendar year 2023, up 81% from 2022.
In FY22-23, the share of SUVs in total luxury personal vehicle sales was 52.7%, as per Jato Dynamics. In FY23-24, the number rose to 59.5. Meanwhile, the share of luxury sedans went down from 43.3% to 34.2%.
The rise of the rich
The number of high net worth individuals (HNIs), with asset value of at least $1 million, was 7.9 lakh in 2022, and is estimated to be 16.5 lakh in 2027. The number of ultra-high net worth individuals (UHNIs), with an asset value of at least $30 million, was about 12,000 in 2022 and could cross 19,000 by 2027, according to consulting major Bain & Co.
Mumbai has overtaken Beijing as Asia’s billionaire capital for the first time, with 93 members in the exclusive league, according to the Hurun Global Rich List 2024. That is showing. Luxury players have recorded high sales in category after category.
According to Bain and Co, the luxury goods market, which includes personal luxury goods, jewellery, home décor, cars, boats and spirits, is now worth $17 billion in India, and is expected to be $90 billion by 2030.
Luxury housing, costing Rs 50 crore and above, has had a storied growth. Luxury homes worth Rs 4,319 crore were sold in CY2023 as against Rs 2,859 crore in 2022, according to data from JLL India. This surge in sales value was accompanied by a rise in the number of transactions, with at least 45 luxury homes sold in 2023, compared with 29 in the previous year.
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