While Indian manufacturer Tata has made a lot of news with their introduction of the Nano, the world's cheapest car, a more unlikely sector of the Indian market is also seeing large growth Luxury cars.
According to Henry Foy of Reuters, the $1 Billion luxury car market in India is expanding at a rate of 40% each year.
But even growth like that still puts India's market far behind China. Mercedes and BMW are on track to sell 20,000 cars in India over this fiscal year. In China, they sold 320,000.
India's nascent luxury growth is being spurred by the younger generation of new millionaires. Whether they are self-made or inherited wealth, a big German sedan or Italian exotic is the new status symbol.
Salesmen are finding that Indian carbuyers are also skipping certain segments of the market, going from a subcompact Honda straight to a large Mercedes sedan with no step in between.
Even though growth for the market is outstanding, there are still a few factors that are limiting.
For high performance offerings, the roads are the biggest issue. The areas of India's roadway network that are paved are marked with potholes and bumps. There are hardly any areas to go quickly, or even drive, a high performance car.
Frequently the lower, faster cars need to be transported by flatbed to India's super dangerous highways for private supercar parades.
The government also levies heavy taxes on imported luxury goods that can go up to 110%, making cars far more expensive than they are in mainland Europe.
Taxes are reduced for domestic goods and many manufacturers are opening Indian factories to take advantage.
While manufacturers shift much of their focus to China, it will definitely behoove them to keep a close eye on India.
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