The luxury vehicle segment in India witnessed a growth in sales last year despite facing headwinds in the form of an upward revision in GST rates around September 2017. Prices, however, dropped prior to this revision and post-implementation of GST, which spurred sales momentarily.
Leading the growth charge was BMW as it posted a record 25 percent growth, followed by Jaguar Land Rover which saw a 49 percent jump in sales. Volumes at Audi, on the other hand, grew marginally at a rate of 2 percent year on year.
The country's luxury segment leader, Mercedes-Benz registered its highest-ever sales in the country of 15,330 units, up 16 percent year on year. In 2016, the German luxury brand sold 13,231 units.Mercedes-Benz continued its leadership in the Indian market for the third consecutive year. Total volume was double than the overall models sold in 2012.
Interestingly, the brand witnessed its best-ever half yearly sales with 8,159 units sold between July-December, 2017 (up 23 percent; July-December 2016: 6,634 units)
The BMW Group recorded combined sales (BMW and MINI) of 9,800 units in 2017, up 25 percent year on year. BMW India sold a total of 9,379 units, up 25 percent from the 7,500 units sold in the previous year. The carmaker said volumes were largely driven by the BMW X1, X5 and the all-new 5-series which went on sale in June 2017.
Sales at Mini, a subsidiary of the BMW Group, were at 421 units, up 17 percent from the 361 units sold in 2016.
Audi announced sales of 7,876 units in the calendar year 2017, up 2 percent from the previous year. The German luxury brand, which completed 10 years of its operations in India, launched 10 vehicles last year, including the A3 sedan, A3 Cabriolet, Q3, A4 TDI, Q7 40 TFSI, A5, A5 Cabriolet and the S5. It is now gearing up to introduce the all-new Q5 on January 18, 2018.
Furthermore, to expand its potential in Tier II and Tier III cities, Audi plans to enter these markets with its ‘workshop first’ strategy, where it will initially provide service facilities for its existing customers and them will expand the dealership network after studying sales potential.
Jaguar Land Rover India
The Indian arm of British carmaker Jaguar Land Rover today announced that it sold 3,954 units in 2017, up 49 percent from the previous year.
Commenting on the results, Rohit Suri, President and Managing Director, Jaguar Land Rover India said, “We intend to sustain this momentum in 2018 with the launch of some exciting new products, with the new Range Rover Velar being the first off the blocks in January 2018."
Globally, Jaguar Land Rover achieved its best ever full-year sales in 2017. Deliveries totaled 621,109 vehicles, up 7 percent from 2016 and more than triple the 2009 figure.
Among the overall sales, Jaguar accounted for 178,601 models, up 20 percent year-on- year. This was the brand’s strongest ever full-year performance and was driven by sales of the Jaguar F-Pace, XE and XF, including the all-new XF Sportbrake.
Land Rover sold 442,508 vehicles in 2017, up 2 percent on 2016. The Discovery Sport emerged as the best-seller, retailing 126,078 vehicles.
Swedish carmaker Volvo sold 2,029 vehicles in India in 2017, a growth of 28 percent from the 1,584 units sold in 2016.
Commenting on the performance, Charles Frump, MD, Volvo Auto India said, “2017 indeed has been a record year for us as we witnessed the introduction of some exciting products S60 Polestar, V90 Cross Country and the all new XC60. We also successfully rolled out the first locally assembled car XC90. We are on track to double our segment share to 10% by the end of 2020.”
Although luxury carmakers have seen a positive rise in sales in the past year, the growth has been slower than anticipated due to the tax revision under GST.
"Volumes would have easily grown by a good double-digit in the range of 18-20 percent. Growth is now expected in high single-digits or low double-digits," Rohit Suri, President and Managing Director, Jaguar Land Rover India told Autocar India in a recent interview.
Under the revised GST code, the additional cess on mid-size vehicles was raised by 2 percent to 17 percent, on large vehicles by 5 percent to 20 percent and on SUVs by 7 percent to 22 percent. The cess will be levied over the flat rate of 28 percent.
Vikram Pawah, President - BMW Group India, said, “2017 was a challenging year for the automotive industry in India that adversely affected stability and impacted consumer confidence due to several policy fluctuations." He reiterated that the German brand will focus on expanding the size of the luxury car segment in India, which still accounts for a small percentage of the overall passenger vehicle sales.
With inputs from Shubham Parashar
Will luxury carmakers have a smoother ride in 2018?