Millennials, Gen Z driving demand for luxury car rentals in India

Mumbai and Delhi witness fastest growth in demand this year at 35% and 40%, respectively

India’s luxury car rental market is experiencing a surge in demand, particularly in Tier 1 cities such as Mumbai, Bangalore, and Delhi, with executive travellers, especially from the tech sector and younger demographics like the millennials and the Gen Z, increasingly renting high-end vehicles for special occasions and domestic travel. 

Luxorides, a luxury car rental company, observed a 40 per cent rise in bookings on popular routes like Delhi-Rishikesh, Delhi-Vrindavan, and Delhi-Jim Corbett National Park, as well as Chandigarh-Manali and Chandigarh-Ladakh. This growth has also been fuelled by foreigners and NRI travellers seeking ultra luxury travel experiences. 

Mumbai and Delhi are the cities that have witnessed the highest growth in demand — 35 per cent and 40 per cent respectively. Other cities which have shown significant growth include Bangalore, which has seen a 40 per cent rise in demand, Pune (10 per cent), and Udaipur (14 per cent). It was also noted that there were large surges in demand in Jamnagar recently due to the pre-wedding events hosted by the Ambani family as per Luxorides data.

The demand for luxury vehicle bookings varies depending on the season. During the wedding season, bookings can surge to lakhs, whereas at other times, the number can drop to less than 10,000. Corporate bookings also tend to be high during the busy season. Luxorides gets around 100-150 bookings per city per month. Delhi sees about 170-200 bookings, Mumbai 150-170, Bangalore records 110-125, while other cities average between 40 and 70 bookings per month.

Aaditya Mishra, co-founder and director of Luxorides, said, “The luxury travel market in India is expanding, particularly in top-tier cities, and we ourselves have been experiencing a 20 per cent surge in demand across India. This trend is driven by young professionals and a growing domestic travel market, and we are responding by strengthening our technological infrastructure and creating a more interactive, user-friendly and scalable system.”

Harman Preet Singh, marketing director, Pune Travellers & Travel Ease, stated, “We have seen a rise in the booking of luxury cars by Gen Z for events like graduations and birthday parties. Elections, too, can be good for business. This year, news channels, corporations, and everyone else needed to move around a lot during the election season. That helped keep our off-season (which starts in March) from being a slow period." 

The overall Indian car rental market was approximately valued at $2.9 billion in 2023, and is expected to reach $3.8 billion by 2028, projecting a compounded annual growth rate (CAGR) of 5.5 per cent during the forecast period (2023-2028) as per industry peers. It has also been noted that there has been a rise in domestic travel, particularly among the younger demographics who are increasingly opting for luxury car rentals for special occasions like weddings, birthday parties, and weekend getaways. 

However, the entry of new players and the resultant competition is driving rental rates down. 

According to Muzamil Siddiqui, co-owner of Exotic Car, “The luxury car rental market is becoming more competitive. Price sensitivity among consumers is leading to lower rental rates. For instance, the rental for a high-end car like a Mercedes, typically valued at Rs 2 crore, has dropped from Rs 15,000 to as low as Rs 10,000 to Rs 11,000, due to intense market competition. Lower international tourist arrivals are also a challenge.”

The cost difference between renting a luxury vehicle and a standard one is significant. Standard sedans like the Swift Dzire, Honda City, or Toyota Crysta can be rented for less than Rs 5,000 for an 8-hour, 80-kilometre period. On the other hand, premium cars such as the Toyota Camry or Kia Carnival cost less than Rs 10,000 for the same duration, which amounts to a 70-100 per cent increase over standard sedans.

The ticket size for renting luxury cars can be anywhere between Rs 10,000 and Rs 5 lakh. For those seeking higher luxury, rentals for models like the Mercedes GLE, BMW 5 Series, and Mercedes S Class start from Rs 10,000 and can go up to Rs 50,000. Rentals for ultra-luxury or sports cars like the Mercedes Maybach, Range Rover Vogue, and Rolls Royce range from Rs 50,000 to Rs 5 lakh.

Going luxe

Luxury car rental company Luxorides observed a 40% rise in bookings for routes like Delhi to Rishikesh, Vrindavan, and Jim Corbett
 

The demand for luxury vehicle bookings varies depending on the season

The average ticket size for renting luxury vehicles is between Rs 10,000 and Rs 5,00,000

Rentals for high luxury models like Mercedes GLE, BMW 5 Series, and Mercedes S Class start from Rs 10,000 and can go up to Rs 50,000

Rentals for ultra-luxury or sports cars like the Mercedes Maybach and Range Rover Vogue ranges between Rs 50,000 and Rs 5,00,000 for 80-kilometre period