Oct. 5: Luxury car makers such as Daimler Benz, BMW and Audi are pulling out all stops in a bid to corner a share of the luxury car market in India. Apart from increasing production capacity and dealership networks, firms are also looking at measures such as financing and resale.
On Tuesday, BMW started its own financial services arm — with the sole purpose of funding sales of its vehicles. The company would be investing a total of $50 million in this arm. A company official claims that financing support in other markets has translated into a jump of about 10 per cent in sales.
Rival automaker Mercedes Benz also plans to launch a vehicle finance arm in India — likely to be launched by next year as per media reports. Incidentally, Mercedes and BMW have both sold more cars in the first nine months of 2010 than in all of 2009. The third German automaker, Audi, has sold 2,178 cars so far in 2010, a jump of over 60 per cent from corresponding figures for the last year. Audi is planning to expand its dealer network in India to 18, from 11 at this point. In a bid to improve its sales, Mercedes has come up with a ‘pre-owned’ cars scheme — where it provides a manufacturer backed warranty as well as support in documentation and finance for used cars.
“It is very important for the luxury car makers to be present in India. The Indian market is expected to grow by 30-35 per cent annually. No where in the mature markets you will see this kind of double digit growth,” said Mr Abdul Majeed, head (automotive division), Price-waterhouseCoopers.
He said that the luxury market will see good demand as people move from middle class to higher class due to good economic growth. “Last year some 10,000 units in the luxury segment were sold, while 3-4 years back sales were just 2,000 units,” said Mr Majeed.