The luxury car market in India has a huge growth potential, and the launch of two new uber-cool SUVs are part of the slew of big launches planned for 2016.

Land Rover

We have always known that the Indian market is huge for luxury cars. How big? We can only gauge its potential from the fact that India has seen the launch of two new luxury SUVs within the span of a ten days.

Just this month, Land Rover launched the petrol derivate of its premium and versatile SUV – the Discovery Sport.  The SUV, with optional 5+2 seats is powered by a 2.0L, 177 kW engine and boasts of an efficient 9-Speed Automatic Transmission with Rotary Drive Selector, Terrain Response^®, Panoramic Sunroof, Grained Leather seats, Rear View Camera, Park Assist among many other exciting features. Rohit Suri, President, Jaguar Land Rover India Ltd (JLRIL), says, “This launch will help us broaden the appeal of this fabulous premium versatile SUV for customers who are more inclined towards driving a vehicle with a powerful petrol engine at its heart along with Land Rover’s legendary off-road capability and reliability – a perfect combination of performance, capability and composure.”

Porsche

An array of features distinguishes the New Discovery Sport. These include Land Rover’s trade mark “All Terrain Capability”, Hill Descent Control (HDC), Roll Stability Control (RSC), Electronic Traction Control (ETC), Dynamic Stability Control (DSC), Command Driving position, Adaptive Xenon Headlamps, Panoramic Sunroof, multiple USB charging points etc. It also features a remarkable Park Assist feature, which helps in parallel parking and Park Exit & Perpendicular Park which are hugely popular with many Discovery Sport customers.

Then there is Porsche’s iconic 911 sports car, which debuted in 1963 as a hard-top coupé called 911 Targa, with a detachable roof and removable plastic in the rear, separated by a thick roll bar for added safety. Nearly 50 years later, the newest car in this series is 911 Targa 4S. While the silhouette has remained largely unchanged, the plastic cover in the back has been replaced with a fixed toughened glass above the rear seats.

 

Porsche- 911 Targa 4S

The center console is clutter-free and there are plenty of creature comforts: dual-zone air-con, Bluetooth, a touch-screen infotainment unit, Bose speakers and sat-nav that comes up on one of the pods. The Targa 911 is a rear engine car. This ride is a 4WD and sits really low, which gives it a center of gravity better than that of a caterpillar.

BMW and Aston Martin are gearing up for new launches. Clearly, the luxury car market in India is growing at a speed that no other luxury category is growing at. Luxury vehicle sales in India stood at 35,300 units, according to IHS Automotive. This is expected to grow to 87,300 units by 2020 with significant volumes being added by the existing players apart from new entrants like Lexus, Infiniti, and Genesis.

Land Rover Discovery Sport

“We are optimistic about the growth of the luxury market in India over the next few years. However, growth will require a host of steps like a long-term stable policy in place, fast implementation of the Goods and Services Tax which is vital for ease of doing business and also a rational duty structure, etc. The exorbitant import duty structure in India makes the price of luxury cars prohibitive and for sure limits the growth potential of the sector,” says Roland Folger, managing director & chief executive officer, Mercedes-Benz India. A slew of model launches and a strategy to focus on compact vehicles such as A-Class and B-Class led the surge in Mercedes’ annual sales. While Audi’s sales increased 1.9 per cent (y-o-y) to 11,100 units in 2015, BMW continued to languish at third spot as sales grew 2 per cent (y-o-y) to 7,500 units. Anil Sharma, principal analyst, IHS says, “In the immediate future, Audi and BMW are expected to shed their under performance and gain some ground from Mercedes-Benz which is the most impacted of the lot from the conditional ban on diesel vehicles  in the national capital region (NCR).” The regulatory development is likely to result in 6.6 per cent yoy contraction in sales volume for Mercedes-Benz.

Sharma said while in 2016 the market growth may be mixed owing to regulatory uncertainties, in the coming years, volumes are certainly going to pick up. Penetration of luxury cars in Indian market is negligible (around 1.1 per cent). That’s why the scope for growth is immense. Brazil, which is a comparable market, has luxury car penetration of around 2.7 per cent.