A rough patch: Mercedes, Audi, BMW see sharp dip in sales

Updated: December 16, 2018 8:00 AM

In line with subdued passenger vehicle sales during the second half of 2018, the luxury car market has also witnessed a bump post July this year.

automobile sector, automobile industry, auto sectorThe volumes of Mercedes Benz India in the third quarter of the current calendar year (July-September 2018) declined significantly by 20% to 3,728 units against 4,689 units during the same quarter last year.

By Pritish Raj

In line with subdued passenger vehicle sales during the second half of 2018, the luxury car market has also witnessed a bump post July this year.

The volumes of Mercedes Benz India in the third quarter of the current calendar year (July-September 2018) declined significantly by 20% to 3,728 units against 4,689 units during the same quarter last year. The German automaker has not revealed its numbers post September but dealers said the November month was not the same as last year and December so far has also remained muted.

The company is likely to report either flat sales numbers or in low single digit for the period ending December 2018, against 15,330 units it sold in 2017. Mercedes Benz declined to comment.

Arch rival BMW India, which reported a 13% increase in sales during January-June 2018 at 5,171 units, saw its sales slow down to 7% at 2,744 units in the July-September quarter. The company has not reported numbers after September.

“From an average of 60 cars in the festive period, the sale has gone down to 35-40 units,” said a dealer who did not wish to be identified.

BMW India has announced a price hike of 4% with effect from January, and dealers are optimistic that the announcement will beef up sales in December.

The worst hit is Audi India, which is struggling with its fortunes in India due to a limited model line-up and had reported an 11% decline in sales during the first half of the ongoing year. Hit by strong headwinds in terms of taxes and stiff competition, the company has been reporting negative or marginal rise in sales since 2016 and the road ahead still looks grim.

“The development of the rupee in the past 12 months has not been promising. As a consequence, the festive season has not been as great as it would have been under normal circumstances,” Audi India Head Rahil Ansari told FE.

He further said the development in the financial market has negatively influenced the customer sentiment, hence, luxury car customers are holding their buying decisions.

Audi India did not report its sales numbers post June. Its sales declined by 31% in 2016 followed by just 2% increase in 2017, against an industry growth of 17%.

While the first half of the ongoing calender year saw a double-digit growth topping 20,000 units, it may not be the same in the second half as sales, particularly during festive months, have slowed down, majorly in north India, several dealers aware of the development said.

In contrast to a 17% growth in 2017 at about 39,000 units and double-digit growth in the first half of this year surpassing half of the sales in the entire 2017, the growth has seen roadblocks as dealers say the footfalls have gone down in the past few months and dampened consumer sentiments are likely to continue till the end of December.

While Tata-owned Jaguar Land Rover had posted sales growth of 66% during the January-June period, the numbers were a reflection on a very low base. JLR sold 2,579 units during the period.

Also read: Mercedes-Benz beats BMW, Audi in Sales Satisfaction in India: JD Power Study reveals!

Althoug comments from JLR dealers could not be ascertained, its president and managing director Rohit Suri said, “In addition to the high GST rate at 50%, the overall luxury car industry has been impacted by increased lending rates, increase in upfront insurance cost by three times and tight liquidity conditions during the past few months. This has dampened overall consumer sentiments and slowed the progress of growth of the luxury car industry”.

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