India’s Luxury Car Market shrinks by a quarter

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.


  1. 15000 to 17000 Luxury cars were sold in the first half of the year 2019 as compared to 20000 units the previous year.
  2. The overall passenger vehicle sales have been estimated to have dropped 10% from January- June 2019.
  3. April to June saw a fall in sales of about 30% to 6500- 7000 units.
  4. 18% decline in sales for the first half of 2019 was announced by Mercedes- Benz.
  5. The last three-four years saw an average of 35000- 40000 units or about 1.17% of the overall passenger vehicle market.
  6. Volvo Car India showed an 11% growth in the first half of 2019.


  1. Continuing weakness in the economy.
  2. High GST rates
  3. Increased import costs
  4. Macroeconomic headwinds, including high-interest rates and rising import costs.
  5. Liquidity crunch, which has affected the Auto- Loan Market.
  6. 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.








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