India's luxury car sector is expected to set records for sales in 2023

18 Jul 2023 , 11:36 AM

The main three luxury automakers, Mercedes-Benz, BMW, and Audi, posted record sales in the first half of 2023, and this year the Indian luxury car market is on track to reach all-time high sales.

Mercedes-Benz, a German luxury automobile manufacturer, reported its best-ever half-yearly sales in India between January and June of this year, selling 8,528 units, up 13% over the 7,573 units sold during the same time last year.

In a similar vein, BMW Group reported record sales of 5,867 luxury vehicles across its BMW and MINI brands during the time, marking its best half-yearly sales in India.

Audi, a different German luxury automaker, reported a 97% increase in retail sales in India in the first half of 2023, from 3,474 units in the January to June 2022 period to 1,765 units in 2023.

“According to our estimation, 21,000 luxury vehicles were sold in the first half of the year, and typically, the second half is better than the first. Therefore, according to our estimation, the total number of luxury vehicles sold this year should be close to 46,000–47,000 units, which is unquestionably a record high”, said Audi India Head Balbir Singh Dhillon to PTI.

The prior high was 40,000 units in 2018, he added, adding that the luxury market suffered in 2019 due to the ‘economic situation’ and that the pandemic had slowed growth starting in 2020.

So everyone is advancing this year, which is a resurgent year. The stronger person is taking the lead. Reality is and always will be like that, he continued.

Similar to what Vikram Pawah, President of BMW Group India, claimed to ET, ‘We will smash records in the second half… With supplies returning to normal, it will really be better (than H1). If everything in the economy stays the same, this year will be a record-breaking one. Demand appears to be strong, the product lineup is strong, has been strengthened by the introduction of the new X5, and the reaction is strong.

There is currently both a very strong momentum and a very deliberate trend toward premium vehicles. Therefore, the demand persists, and as of today, we see no reason why it should,’ Iyer added.

We feel that the medium to long term development story is intact, and that not only will the luxury category increase but also the total automotive segment, according to Dhillon, who is optimistic about the Indian market for luxury vehicles. We currently make up little under 1% of the entire auto market, but by 2030, we hope to get to 2%.

He argued that India’s luxury car penetration is only around 1%, in contrast to developing or recently evolved Asian economies where it is between 5 and 8% of the sector. 

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