It's definitely not a happy new year for those planning to buy a luxury car. The BMW Group on Wednesday announced a price hike of 5-10% across the BMW and Mini range from January 1, following similar announcements by rivals Mercedes-Benz and Audi.
Philipp von Sahr, president, BMW Group India said, ďWe want to maintain sustainable leadership in the Indian market with a strong brand and an exceptional model range. With the price increase BMW Group will maintain its premium positioning in the Indian luxury car segment".
Earlier in November 2012, Sahr indicated the recent price wars in the luxury segment was impacting profit margins and leading to brand dilution. BMW is the leader in the luxury car segment, which has a market size of about 22,000 units (in 2012). It makes sedans such as the 3, 5 and 7-Series, SUVs like the X1, X3 and X5, and will launch its new entry model, the 1-Series late next year.
On Tuesday, German rival Mercedes-Benz announced a more modest 1-3% price increase across its range. However, customers would have more time to buy Mercedes cars at the older prices since the new rates come into effect only from January 14. "Rising inputs cost, volatility of the rupee-euro, high interest rates and other associated factors have put significant pressure on us. Consequently, we are forced to share a part of this burden with our customers," said Eberhard Kern, managing director & CEO, Mercedes-Benz India.
Citing similar reasons, Audi, a Volkswagen Group company and the second-largest player in the segment, had also announced a price hike of up to 5% last week. Effective form January 1, the range of price increase will be R59,000 to R3.69 lakh, it had said.