By now, even a casual industry watcher is aware of the severe hit that India’s auto industry has taken due to the coronavirus pandemic. The luxury sector has been particularly badly affected, taking it back taking it back by five to seven years, according to according to the head of Audi India, the Indian subsidiary of the German premium car maker. Balbir Singh Dhillon said it will take two to three years to recover lost ground and reach the levels seen in 2014-15.
While talking to the local press, Mr Dhillon commented that due to the slow recovery and positive sentiments seen in the auto industry post-lockdown, sales growth is expected in 2021, though the rise will come on a lower base.
In 2014, luxury car sales in India stood at around 30,000 units, rising to 31,000 units in 2015.
Last year, the country’s luxury car market, consisting of BMW, Mercedes Benz, Audi, JLR and Volvo, is estimated to have sold nearly 35,500 units, down from 40,340 units in 2018.
Mr Dhillon remarked that India’s luxury car market is happy to be moving in a positive direction. Noting the low motorization levels in the country, he said there less than 30 cars for every 1,000 people in India, as compared to other developing or developed countries where it is somewhere as high as 800 in China.
He stated that what India offers currently is a great deal of long-term potential, with a V-shaped recovery expected in the economy in 2021, on the base of a lower economic activity this year, which will definitely improve the market.
Mr Dhillon noted that the demographics of India also play a role. 65% of population is under the age of 35. He said these individuals not believe in only saving but also in spending, these are keen to experience things rather than put the money in their bank accounts and own goods. This attitude also impacts the priority given to luxury goods ownership.