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Luxury car market to have slowest growth: Andreas Schaaf
Posted on 30 Jul 20128,860 Views2 Comments
BMW India head forecasts slowest growth in 10 years due to high cost of purchase and ownership
Sales of Indian premium and luxury cars are expected to sputter to a crawl this year to its slowest pace in the last decade. The luxury segment may not even touch double-digit growth this year, says Andreas Schaaf, the managing director of BMW India, as a hike in import duty, rupee depreciation and rising petrol prices keep the rich away from buying their dream cars, which have become more expensive.
The segment has been growing at a compounded annual growth rate (CAGR) of above 30 per cent over the last few years. But the gravity of the current slowdown is such that despite plans to launch four to six new products over the next 12 months, BMW India has revised its target downwards for 2012 and 2013 as well.
Talking on the sidelines of the launch of the New 3 series sedan, Schaaf,told ET, "It has been one of the toughest years for the luxury car market in the country. First a series of petrol price hikes followed by an increase in import duty for cars and then the steep fall in the rupee all this have made it difficult to price our products."
Earlier in the year, BMW India reportedly aimed to achieve 30-40 per cent growth, but Schaaf says the company will grow by just 10 per cent this year.
Peter Honegg, MD, Mercedes Benz India concurs, "The market has slowed dramatically and it has impacted luxury car sales and we expect a minimal growth from the segment this year."
Luxury cars, which account for less than 2 per cent of India's 2.2-million car market, grew just 9 per cent in the first six months of calendar 2012 with sales of around 12,000 units, compared with a growth of 80 per cent in 2010 for the same period and 35-40 per cent growth in 2011. In fact, for the first time ever in the last five to seven years, the luxury car market showed a negative growth in the month of May.
The Indian premium and luxury car market has been growing at a CAGR of 30 per cent and stood at 23,000 units in 2011. Earlier in the year, industry players had estimated the market to touch 30,000-31,000 units by the end of 2012,but it seems they will miss the target by a huge distance.
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