Jul 14, 2011
Many of India’s old socialists must be in despair not only with their dwindling political positions but also with the fact that conspicuous consumption, that they had so virulently deplored, is thriving. For them India will always remain a poor country of poor people and they cannot adjust to the new reality that India’s middle class and upper classes are now becoming very affluent with a sizeable portion that is positively rich.
Although the growth of the total automotive market had declined a bit from 30 per cent last year to about 20 per cent during the first half of 2011 the sales of luxury segment continued to accelerate rapidly. BMW notched up a sale of 4,524 units in the first six months of 2011 that was a growth of 107per cent as compared to the previous year. Mercedes Benz hit 3,798 units registering a 58 per cent growth and Audi raced to 2,802 units that was twice the sales of their previous year. The precise sales of other luxury brands like Bentley, Ferrari, Rolls Royce, Porsche, Volvo, etc., are not known but they seem to have been just as impressive.
This acceleration in luxury product sales is triggered by rapidly growing incomes at the top of India’s population pyramid. This has just been confirmed by a study by Capgemini and Merrill Lynch in their very recent World Wealth Report that now ranks India 12th in the world in terms of US$ millionaires. The number of those with wealth exceeding Rs 4.6 Crores increased to 153,000 (a growth of 21 per cent) from a year ago. Every such family can easily afford luxury cars, luxury watches, luxury holidays abroad and most of them are no longer ashamed to flaunt their wealth.
These fancy buyers are however very fickle and they want the best or most dramatic products their money can buy. So many are bypassing respected old brands and going for the new. BMW has shot past Mercedes but their X5 and X3 SUV’s have lost ground to Audi’s Q7 and Q5. But BMW have retaliated with a smaller and cheaper X1 that has sold an impressive 1136 units since its launch in January. Every marque is eyeing its successful competitors and we will see many more exciting offers.
The writer is an automotive expert and the former editor of a national magazine.
* By Murad Ali Baig
