Luxury Carmakers Eye Festive Season For Demand Boost

After a weak first half, luxury carmakers expect sales to rise as the festive season begins this quarter.

Mercedes-Benz India’s Managing Director Santosh Iyer said that geopolitical uncertainties slowed domestic demand earlier this year. However, he expects better momentum now.

“In our segment, purchases are sentiment-driven,” he said. “The RBI cut the repo rate by 100 basis points this year. With the festive season starting, we expect momentum to improve.”

Industry watchers predict sales of 10,000-12,000 luxury vehicles this festive season. Mercedes-Benz India alone has 1,500 pending orders.

Iyer said high-end models are growing 15-20%, while the core segment is also performing well. Only entry-level sales, where the company has limited presence, show some slowdown.

In the last quarter, Mercedes-Benz India grew 10% to sell 4,238 units, outpacing overall luxury car market growth of 5-8%.

Audi India Head Balbir Singh Dhillon agreed the sector faces headwinds. He cited price hikes from a weak exchange rate and geopolitical uncertainty as key pressures.

“At Audi India, we remain confident of growth in the coming months,” he added.

However, for the full calendar year, luxury carmakers expect only single-digit growth due to a high base of 54,000 units in 2024. Last year, sales rose 8% to 54,000 units.

Currently, luxury cars hold just over 1% market share in India—the lowest among major economies. Yet, experts see huge potential in the medium to long term as the country ranks among the top nations for billionaire population.