The luxury car market in India is stabilising after the shock of Goods and Service Tax (GST) and a hike in cess on the luxury cars in the country last year.
Significantly, three of the top five luxury car brands posted double digits growth in the first six months, January—June period (H1).
Market leader Mercedes-Benz and its archrival BMW posted a double-digit sales growth to retain their first and second positions. Volvo Cars, the fifth in the pecking order, clocked a whopping 33 per cent growth compared to the same period last year. The third biggest luxury carmaker Audi and the fourth Tata Motors-owned British brand Jaguar Land Rover have not declared their sales numbers yet.
The growth came despite imposing GST rate of 28 per cent and the cess of 25 per cent in 2017, and customs duty on CKD (completely knocked down) kits to 15 per cent from 10 per cent. Besides, social welfare surcharge of 10 per cent has also been imposed to replace the education cess of 3 per cent charged earlier.
Auto analysts said all these hikes increased car prices by about Rs 3-Rs 6 lakh on a Rs 26 lakh luxury car. For example, Volvo V40 model car, which cost Rs 25.49 lakh in 2017, is now priced at Rs 31.91 lakh at Mumbai showroom.
Mercedes-Benz retained the pole position for a fourth year in a row, selling 8,061 cars, a growth of 12.40 per cent compared to last year when it sold 7,171 units.
BMW also retained its second rank, recording a best ever half-yearly sales. Its sales jumped 13 per cent at 5,171 cars in India during January to June period, up from the same period last year.
Sales volumes of Volvo Cars soared a record 33 per cent to 1,242 units in January-June 2018.
“We attribute this growth momentum to our customer centric measures coupled with an unmatched product and customer service offensive,” Roland Folger, managing director and CEO at Mercedes-Benz India, said.
“Our sales performance is in line with our expectation despite last year’s extraordinary demand in Q2, owing to the anticipation of GST implementation,” he pointed out.
Vikram Pawah, president at BMW Group India, said its strategy of focusing on introducing new and innovative product segments in the Indian luxury car market has started showing results. “The rest of the year looks even brighter with the launch of our popular Volvo XC40 SUV,” Charles Frump, managing director at Volvo Car India, said.