India has one of the future market of automobiles for the world today.. By 2009, India was already home to 40 million passenger vehicles and more than 1.5 million cars were sold in India in the same year (an increase of 26%), making the country the second fastest growing automobile market. Hereby, the luxury car market has been growing at a fair rate of 25% per annum. In the last 5 years, the Indian luxury car market has been found to have tripled, and a significant number of customers have shifted their focus from utility vehicles, to luxury automobiles.
A luxury car typically has the capacity of carrying 5 passengers with equal comfort. In India, most luxury cars are given to the chauffeurs,which needs to be kept in mind as well. “Purchase of a luxury car gives the buyer an immense amount of joy, which surpasses the economic value of the product. It is bought to satiate an altruistic need and the joy of possessing a piece of extreme luxury is an end in itself.”
Some of the reasons for high growth of this luxury segment are as follows:
1. More disposable income due to growth of the economy
2. Attractive loan schemes available
3. Youngsters earning high pay packages due to industrial boom
4. Government policies such as relaxation of equity regulations and reduction of import tariffs pertaining to the automobile industry. They have led to the reduction of prices of the luxury vehicles
The top three players in the country today are Mercedes, Audi and Tata Motors.
Mercedes- It has been rechristened as Daimler Benz India. Mercedes is the only one to have vehicles made completely in India, with localised parts. It holds the credit for being the first luxury brand to have started car production in India, and has recently opened a new plant in Pune. Today it has over nine different models- 2009 M Class, C Class, CLS Class, E Class, SL Class, SLK Class, AMG Class, M Class and the soon-to-be-launched A Class. A Class is expected to take Mercedes into the mainstream, where they have been contemplating of launching sub Rs 10 lakh vehicles. The design of this class is also going to be radically different as opposed to the bigger cars of theirs. Mercedes used upto 7 speed transmissions for its vehicles. Of the total luxury segment, 60% vehicles are manufactured by Mercedes. The company has been taking special care of launching its products in the shortest possible time period of their launches in the international market. Prices start from Rs 24 lakh onwards.
Audi- This German brand, named Audi AG, has revolutionised the Indian market with its innovative and exciting models. The main aim of this company is to compete against the senior rivals such as the Mercedes C Class, and the upcoming brands such as BMW. A6 and A8 are the top end vehicles available. Generally, the company manufactures 2 varieties of cars – Premium and SUV. The models of Audi AG so far released for sale are:
• Premium- Audi A4, Audi A6, Audi A8, and Audi TT
• SUV- Audi Q7
Of these, there are other variants of Audi A4 like Saloon, S4, and RS4, and of Audi A8 like A8, A8L,12 CYLINDER A8, and S8. The SUV model of the Audi AG company, Audi Q7, comes in 2 different variants like the Audi Q7 4.2 FSI and the Audi Q7 3.0 TDI. Apart from these, the company is also planning to launch a new model under their Premium car category, known as RF4. Auadi is now under the flagship of Volkswagen, which also houses the Skoda brand, along with its own range of vehicles, especially the Jetta, in this category.
Tata Motors- Tata was primarily known for its commercial vehicles, until it decided to venture with its own indigenous “Made for India” car, the Tata Indica. Currently, in the luxury segment, Tata houses two of the biggest brand of luxury automobiles worldwide- the Jaguar and the Land Rover.
The Range Rover is one of the premium luxury SUV brands worldwide. They have the capability and the technology to take on almost any possible terrain known to man. Different models that are available in India are- Freelander 2, Discovery 4, Range Rover Sport, and the Armoured Range Rover. The Freelander 2 is a cheaper version of the more expensive Range Rover, and sets a new benchmark for compact, premium 4x4s. It is available with the 2.2 litre TD4 Turbo Diesel engine that combines performance, refinement and fuel economy. Using any one of four settings, Land Rover’s unique Terrain Response System maximises traction across a range of different surfaces through the vehicle’s electronic management system and traction aids. The engine in Freelander 2 is mounted transversely, as opposed to longitudinally in other competition vehicles.
1. Safety – In a relatively compact vehicle, this gives more room to provide excellent crash protection
2. Styling – The freed-up space offers more flexibility in front-end styling
3. Packaging – This enables a larger engine in a smaller engine compartment, plus allows shorter bonnet and more room in the cabin
The Jaguar brand has three models- the XJ, the XF and the XK. The XJ brings elegant, striking contemporary designs to luxury vehicles, and are known for their cat-like appearances. They are constructed using Jaguar’s aerospace-inspired aluminium body technology, which makes the XJ lighter than its rivals. These technologies significantly improve performance, handling and economy while delivering increased strength, refinement and safety. The XJ also benefits from the most advanced, powerful and efficient Jaguar powertrains ever – 3.0L V6 Diesel S AJ-V6D GEN III S and 5.0 litre 385 PS AJ-V8 Gen III naturally aspirated direct injection V8 petrol.
Mergers and Acquisitions
1. Tata Motors- Land Rover plus Jaguar
In June 2008, Tata Motors announced that it had completed the acquisition of Jaguar and Land Rover (JLR)) brands from Ford, at US$ 2.3 billion. The acquisition was set to help Tata Motors get its footprint on the luxury segment. It would be a company owning cars from the cheapest (US$ 2500) Tata Nano to some of the most expensive.
2. Volkswagen- Audi plus Skoda
In 1991, the German brand Volkswagen took a 30% stake in Skoda and educated the workforce to attain Western quality standards. Skoda wanted to position itself within the VW marquee rather than just be a part of it. Octavia, Skoda’s first VW-backed model was released in 1998. The next car, the Fabia came with an advertising message, telling people “The Fabia is a car so good that you wouldn’t believe its’ a Skoda. ” By early 2000, Skoda had a waiting list for its vehicles.
Other than Audi and Skoda, VW also owns top luxury makes Lamborghini, Bentley, Bugatti and Porsche.