Luxury car sales enter the slow lane in H1

Time of India

a day ago

New Delhi: Luxury vehicle sales in India lost momentum in the first half of 2025, as stock market uncertainty and geopolitical tensions made buyers wary, industry executives said. Some 22,900 luxury cars were sold in the first six months of the year, according to industry estimates-an increase of 1.8 per cent over the same period in 2024. In the mainstream passenger vehicle market, sales grew by about 2 per cent till May and then declined in June.
Industry body Society of Indian Automobile Manufacturers (SIAM) is yet to release data for car sales for the January to June period. Market leader
Mercedes-Benz
, which had posted 10 per cent growth in sales in the last quarter to 4,238 units, recorded muted growth for the six-month period to 9,013 units.
"Our sales last quarter were driven by demand for top-end vehicles and electric cars, where volumes increased by 20 per cent and 157 per cent , respectively. We do not have many cars and are not participating in the entry luxury segment, where our sales are lower," said Mercedes-Benz India's managing director, Santosh Iyer.
"But that said, there is a lot of uncertainty in the broader market on account of the geopolitical situation, tariff decisions, price increases... For the (luxury vehicle) industry, for the entire year, we expect volumes to grow modestly in 2025."
The German automaker's India unit has pending orders of about 1,500 cars, with a waiting period on some high-end models stretching to January 2026. But given the high base of more than 50,000 units in 2024, the company expects the industry to grow in single-digits in 2025.
Audi India's head, Balbir Singh Dhillon, said, "As an industry, we are facing headwinds as slowing demand-driven by price increases from a weakening exchange rate and heightened market uncertainty amid evolving geopolitical tensions-continues to impact performance."
The company's sales in the first six months of the year fell by 14 per cent to 2,128 units. Singh, however, is confident of growth in the forthcoming months, which he said would be "driven by growing customer aspirations, exciting product launches and focus on delivering exceptional customer experiences".
German rival BMW managed to buck the trend to report a 10 per cent increase in sales at 7,774 units between January and June 2025.
Vikram Pawah, president and CEO of BMW Group India, said, "Consumer sentiment was impacted to a certain extent in the second quarter due to the geo-political situation and increasing exchange rates. But with our strategic planning, fresh product portfolio and smart financial solutions, we carried forward the performance momentum."
The company expects "to close 2025 on a high note with double-digit growth".
In 2024,
luxury car sales
grew by about 8 per cent to more than 50,000 units. This category has a little over 1 per cent market share in India-the lowest among major economies. India, however, offers ample growth potential in the medium to long-term, given that it is home to one of the highest number of billionaires worldwide, industry experts said.
Between 2023 and 2028, India will see the highest increase for any country in the number of ultra-high-net-worth individuals (UHNWIs), with a net worth of $30 million or more, as per Knight Frank's flagship study, 'The Wealth Report 2024'. The number of ultra-rich Indians is expected to surge by 50 per cent to 19,908 in 2028 from 13,263 in 2023. India will be followed by China (47 per cent ), Turkiye (42.9 per cent ), and Malaysia (35 per cent ), according to the report.