[pqr]

FY 2021-22 Indian luxury car market analysis

The Indian luxury car market is going through a recovery phase after COVID-19 induced massive de-growth in 2020. Luxury car prices have also gone through the roof in the recent past. Adverse foreign exchange rate development in the recent past is one of the major reasons, as all luxury cars in India comes through CKD (completely-knocked-down) or CBU (completely-built-unit) route. Impact for different players is different, based on the currency their parent company chose to bill cars in India and the effective currency hedging policy their treasury department adopt. Euro has cooled down in 2022 but USD is still on the boil.



On top of that, input cost inflation in recent times and the rise in the price of precious metals used in emission control equipment added to the misery. Chip shortage added to supply-side constraints as well. However, despite all adversities, demand came back in the luxury car segment as well and most players are doing well.

FY 2021-22 Industry players

Note: Data for this analysis was shared by BHPian CEF_Beasts ( (Mercedes, BMW, Audi & other luxury brand sales in 2022)link). Many thanks to him for sharing the data.

• Mercedes and BMW have an upper hand due to the availability competitively priced diesel engine products in the BS6 era
• Mercedes commands lion share of the Indian luxury car market with dominance in the sedan and SUV segment
• Despite similar product line up as Mercedes and diesel engines availability, BMW+MINI is distant #2 in the market
• Audi with petrol sedans, some CBU products and generous discounts was able to capture a 12% market share
• Within the JLR portfolio – Jaguar is struggling, Range Rover sold more cars than the Land Rover brand
• Volvo with petrol only strategy transition with refreshed product line up stood at a respectable 5% market share

Top 20

• The top 10 products cover 62% market and the top 20 together 85%
• Mercedes E-Class LWB is best-selling product in the Indian market, way ahead of everyone
• BMW fielding twin products under 3-Series nameplate has 7% market share with #3 position
• The top 10 slots are occupied by 6 sedan products and 4 SUV
• Mercedes has 5 products in the top 10 rankings each commanding a significant chunk
• BMW is just behind Mercedes with 4 products in the top 10 categories
• The highly discounted Audi A4 was able to occupy a single slot for Audi in the top 10 ranking

Products

Mercedes



Mercedes has quite a good lineup of products in the Indian market, competitively priced diesel engine products and nearly every product is doing quite well. C-Class despite in its fag end of PLC sold in good numbers. No wonder why Mercedes Benz India MD is bullish on historically selling the most number of cars in 2022. The absence of diesel-powered Audi SUVs and sedans is also helping Mercedes's cause here. Overall it seems in India - people prefer luxury and in-cabin space over the sportiness attribute of products.

• E-Class is the anchor product with the highest portfolio share of 25%
• Nearly 6 year old GLC is doing quite well
• New A-Class has got good traction with a longer wheelbase
• GLA 2nd-generation is doing better than its predecessor
• GLE and GLS are the respective sub-segment leader

BMW+MINI



Unlike Mercedes, the BMW portfolio’s higher slots are occupied by lower-priced entry-level products. Does it also indicate that chauffeured Indian audiences prefer luxury quotient over sportiness credentials? If so then BMW needs to focus on a softer suspension setup in the Indian market.

• Despite age, X1 contributes 25% of BMW’s portfolio
• Just like the predecessor 3 Series GT, LWB 3 series contribute massively to BMW’s portfolio
• BMW’s SUV products don’t have much steam in numbers, with the expensive X5 doing better than X3 and X4
• Mini is doing pretty well in the niche segment cut out for self

AUDI



Audi was struggling throughout the year with its exorbitant priced CBU Q2 and petrol-only A4 and A6 being sold at huge discounts. The absence of Q5 and Q7 for the larger part of 2021 also compounded the problem. So nothing much to conclude from Audi’s weak position in the Indian market, which is apparent.

The only solace for Audi was the good acceptance of BEV products. Audi has better potential in BEV segment, only if they bring entire BEV SUV products through the CKD route before others, as it already has a competitive BEV SUV portfolio globally, with good technology in every improvisation cycle with partners like Porsche and Rimac.

JLR



JLR is kind of lost in Indian market. Jaguar sedans are in dire straits with discontinued XE (unofficially) and CBU only XF. However, Range Rover products have shown good potential among Indian audience craving for luxury. Range Rover brand became new darling of celebrities from movie and cricket world. Despite high price, Range Rover Evoque and Velar are regarded as luxury accessories in urban India.

Volvo



Volvo was in the petrol engine transition phase and now has all petrol-powered cars in India. New design language makes them a looker and helps in better acceptance among an urban elite. Volvo is the only luxury car maker in India to offer ADAS features from entry-level XC40. Still, they have a lot of catching up to do with Germans in terms of outright performance and interior finesse. They also need to be more vocal in marketing, their cars have ADAS features, but never gone aggressive with its marketing.

• SUV products are doing better than sedans
• The expensive XC 60 is selling more than the entry-level XC40

BEV Products

• Luxury carmakers sold 198 CBU BEV in India that contributes 0.7% of the Indian luxury car market
• Audi has an edge in the race of luxury BEV with 96 cars sold in just under 9 months
• Jaguar too had a considerable share of 35% with I-Pace available in three variants
• Mercedes started feeling the heat with the arrival of other competent BEV products and were able to sell a mere 30 low slung, uninspiring EQC
• That’s the reason why Mercedes silently reduced the price of EQC in January 2022
• https://www.team-bhp.com/forum/elect...-discount.html (Mercedes-Benz is selling the EQC electric SUV at a ₹7 lakh discount)
• BMW sold a mere three iX since launch in December 2021 till March 2022, which seems to be cars for launch and media drive activity
• It seems as if it was a quick BEV namesake launch and they are not ready to deliver cars to customers in India as yet
• In the BEV market nobody has a first-mover advantage, the best product will take the cake irrespective of the timing

Body-style

• Unlike mass-market segment, chauffeured around sedan body-style still hold quite a big share in luxury car market
• Mercedes’s body style split is 50-50 due to strong sedan portfolio
• Besides X1, other SUV don’t have big contribution in BMW’s otherwise strong looking SUV lineup
• Audi was largely relying on CKD A4 and A6 in 2021, and Q5 and Q7 production started quite late in 2021
• Jaguar’s sedan portfolio is nearly dead with a handful of XF sales, recently with a complete switchover to the CBU route
• Volvo has a good SUV lineup now and so is the strong SUV mix in the portfolio

Sedan

• The car that started the luxury car phenomena in India is the king of the sedans – the E-Class
• 3-Series LWB is the flag bearer for BMW in the sedan segment
• A-Class got its 3rd position due to extended wheelbase
• Audi secured 4th position by stretching A4’s price point and discounts
• Lack of space at the rear limits the BMW 2-Series' appeal
• 5-Series seems to be struggling to keep up with the LWB E-Class

Sedan segments



To get better understanding of the sub segments, a two dimension array was created. Ex-showroom price on Y-axis to show positioning and length on X-axis as proxy to in-cabin space. Some products are still misfits, and some products deliver extra value by being different as in the case of Mercedes Benz E-Class. In case of sedan higher priced but bigger sedans have a major market share, and the majority of them are chauffeured.

Sedan sub-segment

• A-Class with a longer wheelbase than its predecessor has an edge over 2-Series
• Change value proposition means better traction for A-Class

• BMW has fielded two products -3 Series and its LWB version to counter Mercedes
• Petrol A4 is underpowered to take on 3-series so it has to make up with hefty discounts
• C-Class in the last phase of PLC shows up better fight with its well-aged exterior design
• Volvo S60 remains quite well equipped and underrated car in the segment

• E-Class LWB was a game-changer, and it maintains its leads with a 56% share
• BMW has to field two products - 5-Series and 6-Series GT to counter E-Class LWB, but in vain
• A6 though not too old, has to live with discounts

• Best car in the world – S-class new generation was launched in October 2021, thus losing some volume in transition, remain the segment leader
• BMW 7-Series came close but will find it difficult in next full year run
• CBU A8 is just a drop in the ocean

SUV

• BMW X1 remains the best-selling luxury SUV in the country
• Rest all the slots are competitively occupied by Mercedes
• Volvo got a toehold in the top 10 SUV slot
• Range Rover made it much farther than the poor man’s Land Rover

SUV segment



SUV segments are a little trickier than the sedan segments, so viewer discretion is advised. Many products seem to be a misfit in a particular quadrant. Here one thing needs to be understood, this is product classification and not the segmentation approach used in marketing. In marketing, the end-user is segmented and products are designed to meet the needs of that end-user segment. For example, look at the top right quadrant, each group of product in the red box represent a different customer segment – Lamborghini Urus or Aston Matin DBX will appeal to rich kids and Bentley Bentayga or Rolls Royce Cullinan to their rich dad.

SUV Coupe



BMW X6 is credited to start this segment globally in 2008. SUV coupe, available only in luxury car segment, is catching up in India as well. All SUV coupe numbers put together commands 3% market share of luxury SUV category with considerable 408 units. This is significant, considering all SUV coupe price range starts over ₹ 70 lakhs.

SUV sub-segment

• X1 has best exterior stance, so is selling well despite interiors age GLA stance and price is not helping to grab higher sales
• But GLA pricing did help BMW to jack up X1 prices in recent time
• CBU Q2 seems to be stop-gap arrangement for Audi
• XC40 is available in fully equipped single petrol variant, thus limits its appeal
• Range Rover Evoque sales number seems quite good despite being the most expensive car in the segment

• GLC is doing phenomenally well with 50% segment share
• Volvo’s best-selling car in India is also holding quite well in company of worthy competitors
• BMW seems to be lost in the segment
• Being entry level product in Land Rover world, Land Rover Discovery Sport always did well
• Audi Q5 was introduced quite late in the year, so needs time to catch up

• Introduced in 2020, GLE is holding lead position quite well
• X5 has to play second fiddle again despite being quite a competitive package
• Range Rover Velar’s sleek design makes it quite a luxury accessory in the segment
• Audi Q7 is restarting new journey with petrol only engine that too quite late in the year

• This is quite a unique segment in itself appealing different audience
• Range Rover Sport is doing well with 60% share
• G-Class numbers looks good given the price tag it carries
• CBU Audi Q8 is neither here nor there kind of product in Indian market

• GLS numbers are too good in the segment
• Seems BMW is not doing something good with competent X7
• Range Rover numbers seems little low

Volume distribution across Ex-showroom price range



This graph may seem little complex to understand, but it gives insight about brands positioning and purchasing power of Indian customer.

• For industry 80% sales comes from cars priced between ₹40 lakhs to ₹80 lakhs
• Volume tapers sharply as prices goes up
• Mercedes gets more revenue from higher priced cars
• BMW gets major revenue from lower priced products
• Audi has actually moved down in revenue yield ladder
• Volvo is concentrated in ₹40 lakhs to ₹80 lakhs bracket
• JLR revenue quality is much richer

Estimated revenue from new luxury car sales

• Luxury car market generated estimated ₹ 9,000 crores sales from new car sales during recovery phase
• Higher volumes and higher priced range cars means higher revenue for Mercedes
• High value JLR product sales brings its revenue collection closer to Audi
• Volvo is doing decently well in terms of revenue

Estimated GST collection from new luxury car sales

• Overall GST contribution is estimated around ₹ 8,000 crores from new car sales
• Despite low volume, luxury cars contribute higher GST in value terms owing to higher price of luxury cars

Comparison with interesting twist and turns

Toyota Vellfire



All imported Toyota Vellfire is priced over ₹ 90 lakhs ex-showroom and still sell in quite a large numbers. This speak a lot about premium imagery ‘T’ brand has and how phenomenal product is. This strange comparison shows how well Vellfire is selling, with BMW X5 is priced in similar price territory and the volume it is doing and volume most luxurious large luxury sedans together doing. Toyota now you tasted water, it is time to consider CKD assembly in India and sell even more Vellfire.

Toyota Fortuner



Toyota Fortuner now priced in territory of ₹34 to ₹48 lakhs (diesel 98% mix) is selling four times over than entire entry level luxury SUV put together. Indian market could be challenging for marketers for market sizing exercise.

Skoda Superb



Skoda has nearly sold as many Superb as Audi A4 and A6 put together. It shows how well Superb is doing in this segment, despite being 6 years old and how underprepared Audi is with their products. Seems Audi need to borrow people from Sister Brand Skoda.

[GTO]

What's also interesting is that, the sales numbers of Mercedes & BMW have largely remained the same over the last 5 - 7 years. Growth has been marginal at best. One is the sales stagnation, the second is competition from A+ products by Volvo, Jaguar-Land Rover etc.

The entry-level Germans are also facing tough competition from excellent value-luxury products like the Kodiaq, Camry and gang. I would buy the Kodiaq over the GLC & even Q5. Fortuner - as you said - is the big daddy of the 40 to 50 lakh segment.

Mercedes is hence going for profitability by higher prices & pushing higher-priced cars over lesser ones. Don't forget their innovative sales model where they took back full control from the dealers too.

Mercedes E-Class LWB is best-selling product in the Indian market, way ahead of everyone

Whoever thought of the E-Class LWB idea deserves a lifetime-achievement award. What comfort, just perfect for chauffeur-driven owners. Sales of the 3-Series LWB as well prove just how important rear legroom is to Indian customers.

Quite surprised that mediocre & boring SUVs like the GLC & X1 are doing well.

All imported Toyota Vellfire is priced over ₹ 90 lakhs ex-showroom and still sell in quite a large numbers.

This car now has a fan club bigger than the Landcruiser's in India. The uber-rich folk absolutely love the Vellfire.

[vb-san]

Originally Posted by GTO

Quite surprised that mediocre & boring SUVs like the GLC & X1 are doing well.

X1 I can understand – the options in that segment are very limited, from what I see the XC40 is the only credible option there (but in Petrol only). Though if I am in the market for a car in this segment, my pick will be a Tiguan or a Compass.
The GLC is indeed a surprise. The car is nothing special, and there are capable competition with the likes of X3 and XC60 (whose combined numbers surprisingly doesn’t make to half of GLC’s numbers).

The Vellfire looks to be a huge hit with the celebrities in India. I understand the space and comfort aspect, but when traveling it feels as luxurious as a Toyota Hiace.

[Maky]

Originally Posted by GTO

Don't forget their innovative sales model where they took back full control from the dealers too.

I was wondering if this would have helped or harmed, It seems status quo.
I guess net-net completely worked in favour of Mercedes.

How is it that the ever bargain-hunting Indian customer was persuaded not to, is this something only the 'Mercedes' logo could have accomplished and not the other two?
Most interesting...

[Ferruccio]

Originally Posted by vb-san

when traveling it feels as luxurious as a Toyota Hiace.

Completely agree. Don't understand why Toyota does not bring in Hiace and Coaster top variants at least as an EPCG CBU import for hotels, hospitals and large tour operators.

[CEF_Beasts]

Originally Posted by Ferruccio

Completely agree. Don't understand why Toyota does not bring in Hiace and Coaster top variants at least as an EPCG CBU import for hotels, hospitals and large tour operators.

OT:

It actually went on sale in Feb 2021, at 55 Lakh ex-showroom. Some 50 units had been brought as CBUs, were they sold nobody knows!!

https://www.team-bhp.com/forum/india...-showroom.html (5th-gen Toyota Hiace launched in India at Rs 55 lakh ex-showroom)

[CosmicWizard]

Originally Posted by vb-san

The GLC is indeed a surprise. The car is nothing special, and there are capable competition with the likes of X3 and XC60 (whose combined numbers surprisingly doesn’t make to half of GLC’s numbers).

I was in the market to buy X3 last FY and it just wasn't available for the first 5 months of the FY so I would probably read this data with the caveat that volumes were affected by availability also. It would be interesting to see how the trends go once supply chains become normal again.

[Sahil]

Excellent analysis and graphical representation! Thanks for sharing!

Quite an eye opener, often when one sees just numbers on a monthly basis you miss several insights.

The Mercedes umbrella brand has always had its advantage in India historically but as new luxury buyers enter the segment their choice on brand is clear. While the E deserves to be leader but the 5 and 6GT combined shouldn’t be all that far IMO. The GLC having such a large market share beats me. Even though we own a GLC300, I found it over priced back then and now it’s almost 40% higher in price yet leads the pack.

The Q5 can do well if Audi starts discounting it like the A6 but they seem to be holding their guns

[DicKy]

Originally Posted by Ferruccio

Completely agree. Don't understand why Toyota does not bring in Hiace and Coaster top variants at least as an EPCG CBU import for hotels, hospitals and large tour operators.

Especially the Granvia/Super Grandia/Majesty whateva...

Imagine Vellfire thrones in 2nd row, Innova captain seats in 3rd row and ordinary bench seats in the 4th row!!! But, then. It would hurt both the Innova and Vellfire sales.

Originally Posted by CEF_Beasts

OT:
It actually went on sale in Feb 2021, at 55 Lakh ex-showroom. Some 50 units had been brought as CBUs, were they sold nobody knows!!
https://www.team-bhp.com/forum/india...-showroom.html (5th-gen Toyota Hiace launched in India at Rs 55 lakh ex-showroom)

Stock clearance at its worst. That too, a good 2-3 years after the next gen came. People/ organisations who want a Hiace nevertheless have been importing them for a long time. Beats me why can't Toyota use the import quota more and bring more models??

[ruchiragrawal]

Originally Posted by pqr

[*] Seems BMW is not doing something good with competent X7

Yes they aren't. These things aren't available for 5 months! Dealer himself has no idea of the tentative days for delivery, and is gladly willing to cancel the booking done 3 months ago!

GLSs are already sold out for 2022.

The new Discovery is again impossible to get this year itself - with no dealers having any car to even test-drive. Defender does not come in this category, since it isn't a luxurious 6-seater SUV - more of a lifestyle offroading SUV.

So, basically just two real luxurious 6-seater SUVs at the 1.2 - 1.7 cr mark.

[JoshMachine]

A very well put together analysis, which throws up some key points about the price distribution among segments. Thanks for sharing

Few things that stood out for me:
* Sedans in 6 out of top 10 positions
* Top 10 dominated by Mercedes and BMW inspite of no clear heavy discounts (like the yesteryears)
* Audi + Volvo sales totally impacted by petrol-only strategy
* Clearly BMW has got the entry-level 'X1' right inspite of it being neither here nor there
* Graph showing "Volume distribution across Ex-showroom price range" throws up a very good perspective.
Within this - in 60 lakhs+ “true” luxury segment, Mercedes sold 62% of its cars, whereas BMW sold 34% and Audi sold 39% -
clearly says about their intended positioning and customer perception of what to shell out money for what car/brand!

[Tutenkhamen]

Head: I should be fearful of J’s (out of JLR) future in India given the abysmal sale numbers (barring F-pace)

Heart: Hold on, 0.1% means 1 XE per thousand luxury sedans that’s supercar territory, purely on an x-axis of exclusivity. What’s the number for a ferrari? 0.01% ?

Addendum: Being from engineering (and data) background, I can appreciate the hard work gone behind collating all this data. Amazing!

[autobahnjpr]

Interesting to see the numbers and the analysis but the most startling fact is that while all the companies fight for a pie of appx. 9000 crores (this is revenue not profit), GOI coolly walks away with 8000 crores in GST alone. Not to mention the other levies, charges etc. Someone was telling me that today if you buy a pricy car, appx. 50% goes to government and rest 50% is left among all the other people in the chain. In Rajasthan for eg. new diesel vehicle registration cost is 14.5 % of the ex-showroom price. Add 28% GST and other charges and you get the picture.

[Contrapunto]

If you take the cutoff as "price point" instead of brand......Toyotas should also feature here.....Vellfire, Landrover and soon Fortuner and Camry :-)

[Dhillon]

Interesting Analysis. I was reading an article today that luxury cars are in huge demand in India right now and brands like Mercedes and BMW are benefiting most from it. Lamborghini has a waiting period of 10-12 months

A line from the article :-

Vikram Pawah, President, BMW Group India, said in the Q1 of 2022, BMW Group India registered growth of 25% and the order pipeline for the next three months is heavy. It is sitting on an order book of 2,000 units for BMW cars, 200 units for MINI brand and there are 1,500 waiting customers for BMW Motorrad bikes.

Source:-
https://economictimes.indiatimes.com...campaign=cppst