Swelling super-rich pushes up sales of class-cars

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: Home to a player like DaimlerChrysler since the mid 1990s, the Indian luxury car market has seen entry of global leaders like BMW, Volkswagen, Lamborghini and Rolls Royce in the last few years as the segment has consistently grown above 25%.

More than 5,000 luxury cars were sold in 2006, up from 3,000 cars in 2005 and just 1,000 in 2004. Over 80,000 millionaires in metros and mini-metros have fuelled increasing demand for these vehicles priced at of Rs 25 lakhs and above. Even though there are close to a dozen luxury car brands on the Indian roads today, the market still makes up for less than 1% of the overall car market of about 1.3 million units per annum.

So, what's driving this growth? A feel good factor and consumers' changing mindset are the catalysts, believe car makers.

“There is more demand for luxury cars in the country today than ever before,” affirms Suhas Kadlaskar, finance director, DaimlerChrysler India . Corroborating this view is Collin Kelly, regional director, Rolls-Royce Motor Cars, Asia Pacific, a company which entered India after a 50-year hibernation. Kelly sums up the scenario, “There is an overall feel good factor prevailing in the country today.” DaimlerChrysler, present for more than a decade in the country and with a marketshare of 75%, probably understands the market better than any player.

“People want to get hold of the very best product in the least possible time and it falls in line with our commitment and we oblige to this demand. Mercedes had introduced its new generation E class within five months of its global introduction,” Kadlaskar says.

The luxury car segment will also witness a slew of investments in new units or ramped up capacities, bringing economies of scale and efficiencies in operations.

While German-US car major DaimlerChrysler is already manufacturing luxury cars in India at Pune, BMW is in the process of setting up base in Chennai and VW has already completed formalities for the construction of a brand new manufacturing facility in India.

With Italian major Lamborghini also making its entry late last year, the competition is surely hotting up.