Agencies
Mumbai: If one leaves aside 2016, when sales declined 4.68 per cent, the pace of growth in 2018 is the slowest in a decade, according to IHS Markit, a sales forecast and market research firm.
Attractive schemes and steep year-end discounts did little to attract buyers of luxury cars in a slowing market, shows annual sales data released by companies.
Cumulative sales of luxury models from Mercedes Benz India, BMW India, Audi India, Jaguar Land Rover India (JLR), and Volvo Cars India, advanced 4.9 per cent to 40,863 units in 2018. In the last year, 38,950 luxury cars were sold in the country.
Tighter liquidity conditions, increased up front insurance costs, and increased lending rates, especially in the second half of the year, weighed on buying sentiments, said officials at these companies.
The current year is unlikely to be any better owing to the coming elections and other factors, said analysts.
Luxury car companies in India (with the exception of JLR) count dispatches to customers as sales. If one leaves aside 2016, when sales declined 4.68 per cent, the pace of growth in 2018 is the slowest in a decade, according to IHS Markit, a sales forecast and market research firm.
Albeit on a low base, most of the other manufacturers reported a strong growth over last year but a muted growth of Mercedes Benz, the market leader, dragged down the overall volumes.
Retaining its pole position in the segment for the fourth year in a row, Mercedes sold 15,538 cars in 2018, against 15,330 units in the same period a year ago, the company said in a statement on Tuesday.
Martin Schwenk, managing director and chief executive officer, Mercedes-Benz India, attributed it to “strong macro-economic headwinds”, which resulted in low consumer sentiment and posed significant sales challenges.
“We made a strong comeback in the fourth quarter and were able to achieve a year-on-year growth,” said Schwenk.
Mercedes’s arch-rival, BMW Group India, delivered 11,105 cars (including MINI) in 2018, up 13 per cent over the number of cars it sold in 2017. Of this, the models from MINI accelerated with a growth rate of 66 per cent, with 700 units, further strengthening its position in the small premium car segment, the company said.
BMW also saw significant contribution of up to 50 per cent coming from the locally produced sports activity vehicle range, with strong contribution from the new BMW X3, it added.
Sales at Audi India fell 10.8 per cent during the year over 2017, according to IHS. Audi will release sales figures later this month, said the company’s spokesperson. This is the third consecutive drop in sales for Audi in India.
The Volkswagen group firm, which was topping the sales charts till three years ago, has been sidelined amid growing competition and absence of new model launches and an unclear plan for India, said Puneet Gupta, associate director at IHS.
Though on a much lower base compared to the big three German rivals, sales at JLR India and Volvo Cars India grew at a brisk pace year on year, touching record volumes.
JLR sold 4,596 units, up 16.2 per cent. The local arm of the UK-based firm said the highest volume to date been driven by models such as the Land Rover Discovery Sport, Range Rover Evoque, Jaguar F-PACE, XE and XF, with over half of all sales in 2018 being driven by sports utility vehicles.
Rohit Suri, president and MD, JLR India said despite the challenges in the second half, the growth of JLR India “has been very encouraging,” and it will continue to focus on strong product launches and an ever-improving customer experience.
Driven by the company’s scalable product architecture (SPA) and compact modular architecture (CMA) platforms, it was a year of record sales for Volvo Cars. The Swedish carmaker saw its sales jump 30 per cent to 2,638 units.
IHS’s Gupta expects sales to remain under pressure owing to a high tax structure and uncertainty around general elections. “We expect the segment to grow 5 per cent in the current calendar year,” he said.
(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)
