India’s market for luxury cars shrank by a quarter due to the slowdown in economic growth, the recent government move that increases the tax outgo of individuals earning more than Rs. 2 crore and uncertainty during the elections, which made the buyers cautious.
- 15000 to 17000 Luxury cars were sold in the first half of the year 2019 as compared to 20000 units the previous year.
- The overall passenger vehicle sales have been estimated to have dropped 10% from January- June 2019.
- April to June saw a fall in sales of about 30% to 6500- 7000 units.
- 18% decline in sales for the first half of 2019 was announced by Mercedes- Benz.
- The last three-four years saw an average of 35000- 40000 units or about 1.17% of the overall passenger vehicle market.
- Volvo Car India showed an 11% growth in the first half of 2019.
- Continuing weakness in the economy.
- High GST rates
- Increased import costs
- Macroeconomic headwinds, including high-interest rates and rising import costs.
- Liquidity crunch, which has affected the Auto- Loan Market.
- India’s shift from Bharat Stage IV emission standards to Bharat Stage- VI, as the increased cost associated with the technology change could discourage the buyers.
Brands like Mercedes- Benz, and Audi have maintained their sales through these headwinds. The individual’s buying pattern has changed, which has to lead to purchasing pre-owned cars that are available at less than half the price. This sentiment in the market has lead to downsizing it’s spent in the current environment.