Luxury car market on the rise in Punjab

Despite dwindling agricultural income and increasing suicides by farmers in Punjab, the state remains one of the bestsellers for luxury cars in India. And, the growing density of luxury cars is a clear indication of growing income disparities in the state.

Despite a modest GDP growth rate of 5 per cent in the state in the last financial year, a little more than half the country's growth rate of 9 per cent, and a stagnant rate of growth in agriculture at 2 per cent per annum for the past five years, the automobile sector considers it a potential market for the new launches.

Apparantly remittances from NRIs (non-resident Indians) contribute immensely but another factor is the sudden shift of income because of the real estate boom.

The land prices in the state have broken all records and the landlords and rich farmers are becoming richer by selling land. The quick money earned is being mostly spent on luxury cars.

BMW sold 90 cars in less than six months of its launch while Daimler aims to sell 200 units in this financial year in the state. With the highest density of the Mercedes in Ludhiana, Tai-Pan Traders Ltd (the dealer for Mercedes-Benz) sold more than 550 Mercs in Punjab and expects to sell another 210 by the end of this financial year.

On a recent visit to Chandigarh, the CEO and managing director of DaimlerChrysler India, Wilfried Aulbur, said the market for luxury cars in Punjab was getting mature and new entrants in this segment could create their own market without any effect on the sales of Mercedes.

The market potential of Punjab can be percieved from the fact that Volvo Car Corporation appointed a dealer in Chandigarh at AB Carz Private Ltd (the other two in Delhi and Mumbai).

Other premium models like the Skoda and the Corolla are fetching good returns to the dealers. According to Sachit Passi of Krishna Automobile, all the variants of the Skoda and the BMW were in demand and many of their customers were from the hinterland.

The statistical abstracts depict a dismal picture of Punjab's economy. The state has slipped to sixth slot in terms of per capita income among states in the past few years.

Most of the boards and corporations of Punjab are in dire straits. Substantial number of industrial units have either expanded or relocated themselves in the neighbouring hilly state to get tax concessions, still the state remains a cynosure of all car brands.

The easy availability of bank credit has facilitated the growth of automobile sales but there is no gainsaying the fact that the real estate boom the state helped in covering up the underplaying farm income and the market for the luxury cars has been growing at an average of above 25% in Punjab, said one of the dealer.