Luxury vehicle sales grow in double-digits

Sales of luxury vehicles in the local market grew in strong double-digits in the first half of the year, as well-heeled consumers continued to make purchases, despite inflationary pressures and long waiting periods.

Industry estimates around 17,000 luxury vehicles were sold in the country between January-June 2022, which is an increase of 55% over 11,000 units sold in the year-ago period. Senior industry executives said given the demand companies are working hard to ease supply constraints, scale up production in the upcoming festive season.

German luxury car maker Mercedes-Benz India posted its highest-ever second quarter sales in the country on back of new product launches and sustained demand for existing vehicles. The record sales last quarter were achieved despite significant headwinds faced in form of continuing global supply side challenges leading to longer waiting periods and continuous increase in operating costs.

Overall, the company increased retail sales by 56% to a record 7,573 units in the first six months of the year. Martin Schwenk, Managing Director & CEO, Mercedes-Benz India said, “The first half was among our best-ever, with the exception of H12018. What helped overall was a strong product portfolio, unbroken customer demand. Despite some macroeconomic concerns we have not seen any adverse impact the last few weeks.” However, supply constraints continue to cause production delays and shortfall.

Mercedes Benz ended Q2 2022 with the highest-ever order bank of over 6000 units, up from 4000 vehicles at the end of Q1 2022. Mercedes Benz said while it expects the semi-conductor shortage to continue in coming months, it will make efforts to scale up production and deliver the cars to the customers and reduce the waiting period. “We have a solid order bank of more than 6000 cars which makes our market outlook very positive”, informed Schwenk, adding, “We are trying to increase our production to meet demand. But even with these supply constraints, we feel this could be the best-ever year for Mercedes in India.” The carmaker had previously recorded peak sales of 15,538 units in 2018.

Rival BMW too reported record sales of 5,570 cars (including 379 units of MINI) in the country first half of the year. “ Despite the turbulences caused by various factors in the domestic and international market, we have achieved the best-ever half-yearly sales performance for BMW, MINI and BMW Motorrad. A majority of products are sold out and we are trying our best to match the huge demand. The order books are full and the pipeline for coming months is quite solid”, Vikram Pawah, President BMW Group India said last week.

Sales of luxury vehicles recovered post pandemic and grew by 40% to around 25,000 units in 2021. Mercedes Benz expanded sales 42.5% to 11,242 units, albeit on a low base, to retain its leadership position in the luxury car market for the seventh straight year in 2021. The company is targeting sustaining the growth momentum by launching 10 new products this year. At its peak, about 40,000 luxury vehicles were sold in the local market in 2018.