Uber luxe car? No bar
Jul 04 2014
Those who have arrived itch to make a statement with wheels that burn money
Super luxury cars are selling like hot cakes despite costing anything from Rs 1 crore to a whopping Rs 20 crore. That doesn’t seem too high a price tag for our rich and the famous, who are counted among the growing breed of millionaires and billionaires in the country.
The growth of these ultra-luxury machines is also fuelled by a rising number of young businessmen and women, industrialists, entrepreneurs, Bollywood stars and politicians, who are willing to splurge to make a lifestyle statement of ‘having arrived’.
In big metros such as Mumbai and New Delhi, and even rapidly growing top cities such as Bangalore, Pune and Ahmedabad, it is not uncommon to spot a Bentley, Lamborghini, Rolls Royce, Aston Martin or and Porsche on the road. Other brands such as Bugati, Koenigsegg, Ferrari, Pagani and Maserati are also wowing onlookers.
Among the costliest cars are loaded models such as the Aston Martin One77 and the Bugati Veyron, whose prices can shoot up to Rs 20 crore and Rs 37 crore, the most exhorbitant in India, respectively.
“Our imported brand costs upward of Rs 3 crore apiece and we grew 15 per cent in calendar year 2013 from the previous year,” says Satya Bagla, managing director at New Delhi-based Exclusive Motors, which retails the Bentley brand in India, told Financial Chronicle. He says the super luxury car market in India is pegged around 150-200 units annually and looking at bigger numbers in future.
“We have started the year well, selling many models and we expect to sell over 20 per cent in calendar year 2014,” Bagla adds.
Pavan Shetty, head of operations at Lamborghini India, said in calendar 2013, it sold 21 cars in India, a growth of 29 per cent over the previous year. In 2012, its sales grew 21 per cent by selling a total of 17 units. The company has targeted selling 50 units in 2016.
“The Lamborghini Gallardo has been our largest selling car globally as well as in India. It was our flagship model which was the largest selling model till date in the history of the supercar brand,” Shetty said.
This iconic model would now be replaced by the Huracan that was recently launched at the Geneva Motor Show, he said. Industry sources said the Huracan would cost Rs 3.5-4.5 crore at the Delhi showroom. The price varies as it depends on the customised features opted for by the prospective customer.
The limited edition of the Lamborghini Gallardo model range, which retailed between Rs 2.8 crore and Rs 3.1 crore, has been sold out, Shetty said. He said the Lamborghini Aventador range carries a price band of a cool Rs 4.83 crore to Rs 5.36 crore.
“There is potential in the market for super luxury cars. This is highlighted by the fact that the company has set up its national sales office in the country; one of the few countries considered important for such an investment by the Italian brand. However, growth can be strained due to factors such as high import duties,” Shetty said. Import of fully built cars attracts a custom duty of 165 per cent and above while locally assembled cars need to pay only 30 per cent.
Although Lamborghini is not developing any specific product for India, its products are customised for current Indian road conditions. “We have features like the ‘lift up’ suspension mechanism in-built in each and every Lamborghini model sold in India,” Shetty said. This feature facilitates drives across tough terrains, he said.
Shetty says the wealthy are less sensitive to high interest rates and more resilient overall to downturns, which has fuelled growth of luxury and super-luxury cars in India. “There is substantial increase of disposal income now available with prospective customers that has led to 65 billionaires and hundred thousand millionaires (according to Forbes) present in the country today,” he said.
Shetty said their demographic needs were different from yesteryears. They do not shy away from ‘conspicuous consumption’ and hence, it has new clientele from diverse markets such as Bhubaneswar and Jaipur, among other cities, he said.
The Porsche brand at present sells five models in India. While the Cayenne (eight variants) costs between Rs 71 lakh and Rs 2.08 crore, the 911 model (12 variants) is priced in the Rs 1.28-2.66 crore range. While the all-new Porsche Macan is expected to have a July 2014 launch and will be the sixth model available in India, others in the pipeline are the 911 Targa, Boxster GTS, a more powerful and enthusiastic version of the mid-engined Boxster S roadster, and Cayman GTS, a more powerful and enthusiastic version of the mid-engined Cayman S coupe.
Porsche cars are retailed at present through seven dealerships in Mumbai, Gurgaon, Kochi, Kolkata, Chandigarh, Bangalore and Ahmedabad.
“Apart from luxury cars, even super luxury cars such as Lamborghini, Bentley, Aston Martin have been witnessing increasing sales and expect to grow even further driven by increasing number of HNIs,” Wilfried Aulbur, managing partner at Roland Berger Strategy Consultants told Financial Chronicle.
He said as ownership of the Audi, Mercedes-Benz, BMW and JLR cars becomes more commonplace, the fun-seeking affluent generation would move from the luxury to the ultra-luxury segment, fuelling its growth in India.
“While they may retain a 7-series, S-Class or A8L for their everyday drives, they will in increasing numbers look for Porsche, Bentley, Rolls Royce and other brands to provide them with the excitement and differentiation that they crave,” Aulbur, former managing director at Mercedes-Benz India, said.
In parallel, their expectations regarding service from these brands will continue to rise, raising the bar for OEMs operating in this space, he said.
“Even as the base of the super luxury car is low in India at about 200 units annually, the elite club in India is increasing, especially from the sunrise sectors which would fuel growth of super luxury sports cars from top brands,” Abdul Majeed, auto expert and partner at Price Waterhouse told Financial Chronicle.
He too said the super luxury segment was insulated from any economic slowdown and it was set to grow at 20-30 per cent annually.