Luxury cars feel meltdown tremors, sales plunge by 62%

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New Delhi, Nov 11: The so far unaffected luxury cars segment in India has finally taken a hit. For the first time in 2008, the segment has seen a dip in sales as dealers are not getting finance from banks to build up stocks and luxury car buffs are postponing purchases to tide over the financial turmoil. Consequently, the segment has registered a decline of 62% in October at 26 units as against 67 units during the same month last year.

“The unavailability of finance, high interest rates and higher rate of rejection might not be the problem for deep-pocketed luxury car buyers but lately even this niche segment has become very cautious about parking money in high-end products as long as the financial uncertainty continues to loom over the global economy," says Abdul Majeed, auto analyst and partner, Price Waterhouse.

According to the Society of India Automobile Manufacturers, luxury cars like the 7 Series from BMW India and the S-Class from the stable of Mercedes-Benz India has seen a steep decline in October despite it being the festive month in India.

While sale of S-class Mercedes Benz, the largest luxury car manufacturer in India, fell by 84.1% at a mere seven units last month vis-à-vis 44 units it sold in October last year, BMW India registered a decline of 17.4% at 19 units as against 23 units during the same month last year.  

“At a time when the financial downturn is hitting Indians from all over including the crash in the stock market, people are preferring to hold back their capex decision, both at the company as well as individual levels, for some time before things get normal,” said an industry expert.