Super luxe models drive into the Indian market amid Covid-19 pandemic

Top firms such as Mercedes-Benz, BMW and Audi are betting on the revenge buying syndrome seen after the unlocking last year to boost top lines this time as well

Consumer confidence may be low and disposable income may be rock bottom but the super luxury car brands are hoping the lifting of the lockdown will see some ‘revenge buying’ – extreme retail therapy to make up for the shopping that has been missed.  

The Maybach GLS 600 and the Lamborghini Evo Spyder, priced at Rs 2.43 crore (ex-showroom) and Rs 3.54 crore respectively, went on sale on Tuesday.

Lamborghini expects 2021 to be a record year in India.  Mercedes said all the 50 plus units of the Maybach GLS 600 allotted for India were booked even before the market debut over the last six weeks. The next set will be customized and delivered to customers by Q1 2022.

“I don’t know whether to call it the revenge buying syndrome but in many households in India and various other markets globally, people have a bit more liquidity in their wallet as they haven’t spent on travelling or shopping and various other activities. Hence there is a greater financial capability though I don’t have a scientific study to support this,” said Martin Schwenk, CEO and MD, Mercedes Benz India.

Despite a small market size, super luxury car makers remain optimistic about the Indian market. In the Wealth Report 2021 released in February, Knight Frank, an international property consultancy, said India’s ultra-high-net-worth-individuals (UHNWIs), namely those with $30 million or more, are expected to grow by 63 per cent in the next five years from 6,884 currently to 11,198.

The billionaires club is also expected to increase significantly by 43 per cent from 113 now to 162 by 2025.

Mercedes said all the 50-plus units of the Maybach GLS 600 allotted for India were booked even before market debut

Sharad Aggarwal, head, Lamborghini India, said the luxury segment is driven by dreams and aspirations. “The pandemic has prompted people to graduate to better houses and cars and the uncertainties of health and life have made them think ‘If I can, then why not today? Why should I wait for three or five years?’,” said Aggarwal.

This mentality, along with the ongoing vaccination drive, will help sales rebound at a quick pace. This assumption has prompted Lamborghini to launch the Huracán EVO Rear-Wheel Drive Spyder.

This year, fuelled by the new launches and other enablers, Agarwal expects the super luxury car segment (those models priced Rs 2.5 crore) to reach 2019 levels when the market size was 265 units.

Meanwhile, more younger buyers are providing another encouraging signal. A lot of Maybach GLS buyers are 40-45 years’ old, a sharp drop in the age profile since Mercedes introduced the Maybach brand in India in 2011.

Apart from being the first Maybach SUV, the GLS Maybach 600 will  be only the second Maybach model to be rolled out in the Indian market, following the Mercedes Maybach S-Class.

The company has a strong order book for most of its line-up in India. “Our 2021 product strategy remains on track and we expect a further uptick in demand, especially for top end products. The market outlook also remains positive at this point and we continue to stay optimistic. Our customers can expect more product introductions across segments in the coming months,” said Schwenk.

The top three firms - Mercedes-Benz, BMW and Audi - account for the lion's share of the segment. All three have lined up over 50 new model launches as they seek to recoup the previous year’s loss in volumes.

The pandemic pushed back sales of super premium models (those priced over Rs 30 lakh) in 2020 almost to 2010 levels (see table). The year-on-year decline too was 40 per cent.