The growing number of “millionaires in dollars” in India includes young entrepreneurs or high-income professionals who appreciate the luxury and technology of cars, said Martin Schwenk, CEO of Mercedes-Benz India.
“The base is growing and gradually moving beyond our traditional customers,” Schwenk told Reuters in an interview with Reuters in the western industrial city of Pune, home of Mercedes’ headquarters and factory in India.
“In the future, we will see higher growth rates in the luxury segment than in the mass market,” he said, adding that the average age of shoppers has also fallen below 40, from more than 45 years before.
However, the biggest obstacle to the growth of carmakers worldwide is the lack of semiconductors and the logistical problems exacerbated by Russia’s invasion of Ukraine. For Mercedes India, this has led to a stockpile of 4,000 cars, Schwenk said.
India’s start-up frenzy and stock market boom are creating a new generation of wealthy people indulging in luxury brands such as Rolex, Louis Vuitton and Gucci, according to Hurun India Wealth 2021 Report.
The number of Indian households with a net worth of at least one million dollars has increased by 11% in 2021 to 458,000 and is expected to increase by 30% in the next five years, the report said.
India is largely a small, low-cost car market, with luxury models accounting for just over 1% of total annual sales of around 3 million.
Mercedes is the best-selling luxury brand with a market share of over 40%, says car data provider JATO Dynamics and competes with Audi, BMW (BMWG.DE) and Tata Motors (TAMO.NS) Jaguar Land. Rover.
Its sales in India increased by more than 40% to 11,242 cars in 2021, to a minimum of 7,893 in 2020, hit by the pandemic.
But Mercedes saw an 80% increase in top models, such as the GLS, S-Class and GLS Maybach, all costing more than 10 million rupees ($ 131,337).
Schwenk said that while the pandemic caused some of this demand because more people were “spending for their own pleasure,” India’s luxury car market has shown greater growth potential, a feature that has been lacking. last 6-8 years.
To capitalize on that momentum, the company plans to launch 10 models in 2022, including the locally assembled EQS electric sedan.
While growth in India’s luxury and mass markets is not directly comparable, Mercedes’ state-of-the-art models reflect the nation’s wealth, said Ravi Bhatia, India’s president for JATO.
“The rich have become richer, and some of them have come to improve their lifestyles,” Bhatia said.
JATO’s analysis also showed that Mercedes’ product mix and prices have led to a lower weighted average price of its cars, making luxury segment upgrades available to more customers, he added.
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